- Shares of Samsung Electronics and its affiliates rose Monday morning after Chairman Lee Kun-hee died a day earlier.
- The company announced on Sunday that Lee, 78, died with his family by his side, including Vice Chairman Jay Y. Lee, six years after being hospitalized following a heart attack.
- The senior Lee is credited with turning Samsung into a global technology and industrial powerhouse when he took over in 1987 after his father, Lee Byung-chul, the founder of the conglomerate, died.
SINGAPORE — Shares of Samsung Electronics and its affiliates rose Monday morning after Chairman Lee Kun-hee died a day earlier.
Samsung shares were up 0.66% as of 10:18 a.m. HK/SIN. Shares of Samsung C&T rose 17.31%, Samsung SDS higher by 8.12%, Samsung Life Insurance up 5.86%, Samsung BioLogics was up 0.47% and Samsung Engineering up 0.45%.
The company announced that Lee, 78, died on Sunday after six years in hospital following a heart attack. His family, including his son Vice Chairman Jay Y. Lee, were by his side, according to the company statement.
The senior Lee has been credited with turning Samsung into a global technology and industrial powerhouse. He took over in 1987 after the death of his father, Lee Byung-chul, who founded the conglomerate.
Lee was convicted previously of paying bribes and tax evasion and was pardoned on both occasions.
"His legacy will be everlasting," Samsung said in a statement.
Following Lee's health troubles in 2014, his son Jay Y. Lee became the de facto leader of Samsung.
"Now the market is interested in the impact from the succession because of Jay Y. Lee," said SK Kim, executive director and analyst at Daiwa Securities, on CNBC's "Street Signs Asia."
"He is the de facto leader of the Samsung group," Kim said Monday. "He is a major shareholder of Samsung C&T and Samsung SDS, so market reacted positively on the news."
Going forward Samsung could pursue aggressive measures to secure long-term growth momentum and may consider enhancing further shareholder returns, according to Kim. He expects Samsung Electronics to post strong earnings in 2021, driven by the memory business and greater adoption of 5G mobile technology, the next generation of high-speed mobile internet that aims to provide faster data speeds and greater bandwidth.
Still, uncertainties remain around Jay Y. Lee as the potential successor because of his ongoing legal troubles.
The younger Lee served jail time after being convicted of paying bribes to gain government favors and the scandal triggered the impeachment of former president Park Geun-hye. Reports said the case, being heard on appeal, is set to resume on Monday.
He also faces charges of accounting fraud and stock price manipulation, Reuters reported. The trial for that kicked off this month.
'Face of the Korean economy'
President Moon Jae-in credited the elder Lee for his role in developing the semiconductor sector into a major industry for South Korea and for helping Samsung became a leader in the global smartphone market, Yonhap News reported. "As the face of the Korean economy, Samsung led the way for the growth of our economy," Moon was quoted as saying.
Samsung is South Korea's largest chaebol — or large, family-run conglomerates that have historically played an important role in the country's economic development. Chaebols control vast networks of companies through a circular holding structure and their control typically exceeds cash-flow rights, meaning families often wield undue influence over group companies in spite of small direct shareholdings.
For his part, the elder Lee was the wealthiest stock owner in South Korea, according to Reuters. He held 4.18% of Samsung Electronics' common shares and 0.08% of preferred shares, worth about 15 trillion Korean won ($13.3 billion) in total, according to the news agency. He also held a 20.76% stake in Samsung Life worth about 2.6 trillion won and a 2.88% stake in Samsung C&T worth about 564 billion won as of Friday's closing, Reuters reported.
Total revenue in 2019 from Samsung and its affiliates was worth about 17% of South Korea's GDP, the news wire said.
While conglomerates like Samsung have been responsible for propping up South Korea's economic growth in the past, many citizens have long demanded political authorities curtail their power.
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