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Thursday, Feb 16, 2017

Business, Asia

Will eldest daughter fill Samsung's leadership vacuum?

The Korea Herald/ANN | Song Su-hyun | Thursday, Feb 16, 2017

Lee Boo-jin, daughter of Samsung Electronics chairman Lee Kun-hee and president and chief executive of Hotel Shilla, arrives to preside over the annual general meeting of the hotel stockholders in Seoul March 16, 2012.

Photo: Reuters

Expectations rose Wednesday that Lee Boo-jin, the eldest daughter of the Samsung family, could fill a possible power vacuum to be created if the special counsel team's second request to arrest Samsung heir apparent Lee Jae-yong is accepted by the court.

As market watchers saw the possibility of Lee Boo-jin's role being reinforced across the No. 1 family-run conglomerate in South Korea, shares of her Hotel Shilla continued rallying for a fourth trading day in a row, from around 42,000 won (S$52) to 47,000 won.

After Park Young-soo's special counsel team reapplied for an arrest request with the court for the eldest son of Samsung Chairman Lee Kun-hee late Tuesday, Hotel Shilla's shares jumped around 3 per cent Wednesday.

Read also: Samsung chief appears for 2nd round of questions in graft probe 

On the other hand, Samsung Electronics, led by Vice Chairman Lee Jae-yong, has been sliding for the past week, from around 1.97 million won to 1.88 million won.

Investors have paid close attention to testimony by Park Won-oh, a former executive at the Korea Equestrian Federation and a close aide to President Park Geun-hye's confidante Choi Soon-sil. He had reportedly claimed Lee Boo-jin is more supported by her mother Hong Ra-hee, director of the Leeum Samsung Museum of Art, than her older brother in terms of succession, according to news reports.

 

The 47-year-old second daughter is said to resemble her father the most in character and management style among the three children.

The special counsel has sought to arrest the heir with what they contend is based on a more comprehensive investigation into suspicions of his bribery connections to President Park and Choi, pushing Samsung into a state of high alert over the possibility of an arrest issuance and physical detention.

Samsung released a brief but unyielding statement on the reapplication Tuesday night.

"Samsung has never bribed the president wishing for a price or asked for an unfair favour," the statement said. "(Samsung) will do its best to reveal the truth in court."

Read also: Choi Soon-sil's niece admits to extorting donations from Samsung

Samsung's Future Strategy Office is reportedly preparing measures against newly added accusations in the warrant, including ones that the presidential office exerted power over the Fair Trade Commission to help Samsung comply with the nation's cross-shareholding regulation in 2015 and on the Financial Services Commission to revise regulations on stock listing for Samsung BioLogics last November.

The Seoul Central District Court is scheduled to review the arrest request at 10 a.m. on Thursday.

The business community has remained tense about the impact of the possible arrest of Samsung heir could have on other conglomerates that are also involved in the ongoing bribery scandal. If Lee is arrested, the fallout could reach SK Chairman Chey Tae-won and Lotte Chairman Shin Dong-bin.

However, many are betting on a scenario where the Seoul court rejects the warrant for Lee while issuing one for Samsung Electronics President Park Sang-jin, who headed the Korea Equestrian Federation and allegedly had closer connections with Choi.

"Although it is yet unpredictable whether the court would issue an arrest warrant for Lee, it is highly likely that Park would be issued one," said an industrial source. "Samsung would be expecting this scenario, which is a good defence."

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