[THE INVESTOR] Samsung heir Lee Jae-yong’s trip to Hong Kong raised questions Sunday among industry insiders over its significance, with some saying that he might be preparing for more governance restructuring to complete his succession.
Lee left for Hong Kong on Thursday for meetings with global business partners, according to Samsung officials, although details of the meetings have not been disclosed yet.
Samsung heir Lee Jae-yong
But industry insiders remained mixed in their assessments of his trip to the financial hub of Asia, citing the timing and his business networks there. Some suggested a radical scenario that he might be discussing steps of turning Samsung C&T into a holding company.
“Financial institutions in Hong Kong are working with Samsung to prepare to turn Samsung C&T into a holding company as many have predicted,” said an industry insider based in Hong Kong.
While declining to further elaborate on it, the source mentioned, “Things are underway for the holding company system which could be part of the succession scenario.”
Samsung officially announced in April 2017 that it will not adopt a holding company system. But the conglomerate is facing mounting pressure from the Fair Trade Commission to set up a holding company to facilitate a transparent governance structure and a lawful inheritance from ailing Chairman Lee Kun-hee to his son Lee Jae-yong.
Lee left for Hong Kong a day after a decision on a bloc deal of 1.3 trillion won (US$1.2 million) worth of Samsung Electronics shares that were owned by Samsung Life Insurance, and Fire and Marine Insurance. The FTC chairman has lashed out at Samsung financial units’ stakes in Samsung Electronics, calling it unfair cross-shareholding made to support Lee’s succession.
Some industry watchers say the Samsung scion might have met Victor Tzar-kuoi, current chairman of CK Hutchison, the eldest son of Hong Kong’s richest business tycoon Li Ka-shing, considering traditional ties between the two families formed by their fathers. Lee could have asked for his support in regard to his succession, they added.
Samsung, however, refuted that his trip is strictly about business, not his succession.
“We can’t confirm anything about the vice chairman’s trip to Hong Kong, except for the fact that he’s on a global trip to meet with various business partners,” said a Samsung spokesman. “The final destination is not likely to be Hong Kong, as we predict the trip to take about a week.”
It’s the third overseas trip since the heir was freed in February after spending a year in jail due to his involvement in the former president’s bribery scandal.
By Song Su-hyun/The Korea Herald (firstname.lastname@example.org)