Samsung Group leadership to see major reshuffle

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Samsung Group leadership to see major reshuffle

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From left: Lee Seo-hyun Executive vice president of Cheil Industries, Yoon Boo-keun President of Samsung Electronics and Shin Jong-kyun President of Samsung Electronics

Many in the Korean business community will be eyeing Samsung Group this week, as the conglomerate is expected to make changes in its top leadership.

The personnel reshuffle, which has involved hundreds of senior executives in the past, may provide a glimpse of how the group’s business strategy - notably for Samsung Electronics, its flagship fleet - could change next year.

It also remains to be seen whether the children of the group’s current leader, Lee Kun-hee, will advance in the company as the time for third-generation succession nears.

“There is no written rule about when we will conduct the personnel reshuffle, but in the recent years, it has been done in the first week of December,” said an official of Samsung Group, “and it would be likely the same this year.”

The overhaul possibly could start today, when Cheil Industries and Samsung Everland will finalize the previously announced transfer of the fashion sector from the former to the latter.

The handover will immediately create a clear pathway for Lee Seo-hyun, second daughter of the Samsung Electronics chairman, who has played a significant role in Cheil’s fashion business since joining the company in 2002 as a general manager.

Lee, currently an executive vice president for Cheil Industries, has been overlooked for promotion in the past three years, and many expect that time is right for the 40-year-old to join the presidents’ club of Samsung Group - symbolically at Samsung Everland, the group’s de facto holding company.

Her move - probably together with 1,600 personnel working for the apparel business in Cheil Industries - to Samsung Everland is part of a larger-scale restructuring of the amusement park. In November, Samsung Everland announced that it will hand over or spin off its building-management business and catering business, two of its other key business areas.

The realignment, the group said, will boost efficiency by helping the company focus on what it can do best. The handover of the fashion business from Cheil Industries - which will operate entirely as an electronics firm - and the merger of two IT affiliates, Samsung SDS and SNS - to be finalized next week - are also understood to be in the same vein, the group said.

Some analysts predict a group-wide realignment will follow soon to help it have a more successful year ?most of Samsung Group’s affiliates, except for Samsung Electronics, have not preformed as hoped this year.

However, those moves are also seen to help boost the influence of the three third-generation Lee family members. The catering service of Samsung Everland, for example, could move to Hotel Shilla, and that will give more control to Lee Boo-jin, the first daughter of the chairman and the president of the luxurious hotel.

Lee Boo-jin may also be promoted soon. The 43-year-old, who is called “little Lee Kun-hee” for her leadership as well as for her resemblance to her father, was promoted to president three years ago, a quick advancement that came only 23 months after she became a senior vice president.

It takes about three and a half years to be promoted from executive vice president to president.

Her brother, Jay Y. Lee, was promoted to vice chairman in two years after becoming president, and is thought to have little chance for promotion this time. However, some analysts said that the reshuffle this time would promote some of his key aides, making way for an eventual leadership transition to the heir apparent.

“Lee Jae-yong will need people who can keep step with the impending era of his leadership,” said Chung Sung-sup, the head of Chaebul.com, which provides specialized news about Korean conglomerates.

Chung mentioned Lee Sang-hoon, president and Chief Financial Officer of Samsung Electronics, who headed the group’s Future Strategy office, as one of Jay Y. Lee’s aides who could possibly be promoted this time.

However, who will be promoted to vice chairman - and who may step down from it - is something that always remains to be seen.

Each of the past four years, the group has had two new vice chairmen. Last year, it was Jay Y. Lee and Park Keun-hee, vice chairman of Samsung Life Insurance.

Two presidents, Yoon Boo-keun and Shin Jong-kyun, CEOs of Samsung Electronics, are considered the favorites to join them. Yoon, the president of Samsung Electronics’ Consumer Electronics division, and Shin, the president of the IT and mobile division, are credited for bolstering the electronic giant’s dominance in the television and smartphone fields.

Following the presidential reshuffle, Samsung is expected to announce the realignment of lower-ranked executives late this week.

BY MOON GWANG-LIP [joe@joongang.co.kr]

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