From the Wall Street Journal’s “Samsung Is Without a Leader as Jay Y. Lee Returns to Prison” ($) posted Monday:
Samsung’s de facto leader, Lee Jae-yong, returned to prison, throwing the South Korean conglomerate into disarray during a generational transfer of power as the Covid-19 pandemic revamps key industries.
Mr. Lee, the 52-year-old grandson of Samsung’s founder, received a 30-month prison sentence from a South Korean appeals court on Monday, in a retrial of his 2017 conviction for bribing South Korea’s former president. His prior time behind bars of roughly a year counts toward his new sentence. If granted early parole, Mr. Lee could walk free next year…
The Samsung conglomerate encompasses dozens of businesses—each with CEOs running day-to-day operations—but major decisions require Mr. Lee’s approval. In a sign of his vast influence, Mr. Lee’s detainment triggered a selloff across Samsung’s affiliates, wiping away billions of dollars in market value. Samsung Electronics fell 3.4%, battery makerSamsung SDI Co. slid 4.2% and Samsung C&T Corp. , the conglomerate’s de facto holding company, dropped 6.8%.
“They’ve lost their captain,” said Mike Cho, a South Korean business expert at Korea University in Seoul. “All the power is centered around one person.”
My take: Ethical corporate leadership has its benefits.