Lee Jae Yong, better known as Jay Y
Samsung Electronics Co. heir apparent Lee Jae Yong has been nominated to the board, teeing him up for a bigger role as South Korea’s largest company struggles with a widening recall of its Note 7 smartphone.
Lee, better known as Jay Y., has been helping run Samsung since his father suffered a heart attack in 2014. Now the scion will have to show if he has the mettle to help steer the company through its deepest crisis in years.
Regulators, airlines and Samsung have warned customers to stop using Note 7 phones, plagued by reports that the batteries catch fire while charging. Samsung has lost $22 billion in market value over two days — suggesting damage to the brand could go well beyond early estimates of $1 billion for the phone’s recall. Samsung released the Note 7 in late August to get a jump on Apple Inc.’s new iPhone 7, due in stores later this month. That advantage has now disappeared.
Jay Y.’s board nomination “is a signal that Samsung needs strong leadership in the midst of risk and uncertainty,” said Park Ju Gun, president of corporate watchdog CEOSCORE in Seoul. “By showing the markets that he’s assuming responsibility, Lee Jae Yong may be seeking to take a step forward in the succession.”
Jay Y., 48, will become more involved in strategic decision-making, including mergers and acquisitions, the Suwon, South Korea-based company said in a statement Monday. Now co-vice chairman, he’s expected to be formally elevated to the nine-person board after a shareholder vote in October. Bloomberg
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