Samsung is still reeling from a massive product recall of the Galaxy Note 7, and now some key changes are happening at the top. Jay Y. Lee, son of the chairman Lee Kun-hee, is joining the board of Samsung in what’s widely seen as a step towards formalizing his role as the next head of the company.
“More than two years after the hospitalization of Chairman Kun-Hee Lee, the Board of Samsung Electronics believes that the time is now right to nominate Jay Y. Lee as a member of the Board to allow him to take a more active role in the Company’s strategic decision-making,” Samsung said in a statement.
Chairman Lee was hospitalized two years ago following a heart attack. Since then his son, now 48 years old and worth $6.5 billion, has largely steered the company as vice chairman while his father has remained hospitalized, and largely out of the public eye.
Lee began his career at Samsung in 1991 and became president in 2009, then vice chairman in 2013. In that time he was known for brokering deals with Apple and building partnerships with industry peers like Hewlett Packard and Sony.
Samsung announced it was recalling its well-reviewed Galaxy Note 7 more than a week ago, due to cases of the phone’s battery exploding. The recall process has run relatively smoothly in the United States, but not in Asia.
Samsung didn’t mention recent product issues with the Galaxy Note — which are unfortunately timed in that they have coincided with the release of Apple’s iPhone 7 — but it’s possible that Lee has made the move to take a firmer grip on company operations at a moment of high drama for the company.
Shares of Samsung fell by 7% on Monday, marking their largest daily percentage decrease in more than four years, on investor concerns about the Note 7 recall and its impact on Samsung’s profits. Analysts have reportedly said that Samsung could lose 5 billion won ($4.5 million) in sales as a result of the unprecedented recall alone.
Samsung’s board is made up of four members of management and five independent outside directors; the company’s CFO, Sang-hoon Lee, will step down from his position to create the necessary vacancy for Jay Y. Lee.