heir apparent moves to tighten grip on group firms
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[October 28, 2014]
By Se Young Lee
SEOUL (Reuters) - Samsung Group heir
apparent Jay Y. Lee is moving to acquire small stakes in two of the
group's financial firms, which analysts say will help the scion solidify
control of South Korea's largest conglomerate as a succession looms.
Lee is seeking regulatory approval to purchase 0.1 percent each of
Samsung Life Insurance Co Ltd <032830.KS> and Samsung Fire & Marine
Insurance Co Ltd <000810.KS>, Samsung Group said in a statement. He
is reinvesting after-tax proceeds of 25.2 billion won ($23.97
million) from selling Samsung Asset Management Co Ltd shares to
Samsung Life earlier this year.
Although the companies are already firmly in Samsung Group's grasp,
analysts said direct ownership would allow Lee to formally influence
how they are managed. Samsung Life is also at the heart of Samsung's
complicated shareholding structure and will play an important role
in any succession planning.
Samsung declined to comment on why Jay Y. Lee was buying the shares.
Samsung patriarch Lee Kun-hee has been hospitalized since May
following a heart attack, putting impetus on his children to ensure
a stable transfer of control. Jay Y. Lee, who is the only son, is
widely expected to take over crown jewel Samsung Electronics Co Ltd,
as well as the financial firms.
"I think we're now seeing efforts to establish a Jay Y. Lee regime
in earnest," said Chung Sun-sup, CEO of research firm Chaebul.com.
MORE MOVES POSSIBLE
Korea Investment Trust Management fund manager Baik Jae-yer said
going through the regulatory approval process for Samsung Life now
could also serve as a test run ahead of an eventual inheritance of
his father's shares in the insurer. The elder Lee is Samsung Life's
biggest single stakeholder at 20.8 percent.
"I think this process helps him identify any potential legal hurdles
when he looks to inherit those shares," Baik said. The Financial
Services Commision will likely decide whether to approve the
purchases on Wednesday, said an official at the financial regulator
who declined to be named.
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Samsung Group said the younger Lee had no plans to buy more shares
in Samsung Life or Samsung Fire & Marine at present. Analysts saw no
need for additional purchases to bolster his influence and believed
he was more likely to prepare for the inheritance of his father's
Samsung Life stake.
The conglomerate has pushed through major initiatives to streamline
its structure, including a merger of Samsung Heavy Industries Co Ltd
and Samsung Engineering Co Ltd approved by shareholders on Monday.
Chaebul.com's Chung said Jay Y. Lee could buy shares in other key
group companies such as Samsung C&T Corp and Samsung Heavy
Industries to further tighten his grip, in line with the strategy
pursued by his father.
"Though they may not be big, Lee Kun-hee owns shares in the key
affiliates to ensure that he can exert direct control," Chung said.
"Eventually, the shareholding structure will need to become more
streamlined but that will take a lot of time and resources, so such
stake purchases by Jay Y. Lee will help to maintain control in the
(Reporting by Se Young Lee and Lee Changho; Editing by Ryan Woo and
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