 "Samsung scion joins board as profits tank on Galaxy Note 7")
Samsung heir apparent Lee Jae-Yong took a major step towards control of the family-run conglomerate today, joining the board as the company reported a 30% profit dive following a highly damaging recall crisis.
The move is being seen as a coronation of sorts of the 48-year-old Lee, who is already vice chairman of Samsung Electronics and has seen his influence grow since his father, Samsung patriarch Lee Kun-hee, suffered a heart attack and was hospitalised in 2014.
Board chairman Kwon Oh-Hyun said Lee's elevation would give him a greater say in decision-making at the highest level and help foster "long-term, sustainable value" for Samsung shareholders.
The nomination was approved by an extraordinary shareholder meeting, which also focused on the recall fiasco surrounding the flagship Galaxy Note 7 handset that has hammered the reputation of the world's largest smartphone maker.
"We can now say that Lee's regime has officially begun," said Lee Chaiwon, chief investment officer at Korea Value Asset Management Co.
"I think a new era is coming. The company will become more market-friendly," Lee told Bloomberg News.
Samsung's share price rose more than 2% in morning trade, but then fell back to close up 0.4 %at 1.57 million won.
The shareholder meeting began just hours after Samsung announced a third-quarter operating profit of 5.2 trillion won ($4.6 billion) -- down from 7.3 trillion won a year ago.
The slump was in line with a revised earning estimate two weeks earlier after it killed off the Note 7 due to devices overheating and bursting into flames.
The decision to discontinue production of a model aimed at competing with arch-rival Apple's iPhone was a devastating move for the company, which prides itself on the quality production of cutting-edge technology.
Scrapping the Note 7 saw earnings of the core mobile business drop off a cliff, with the mobile division's operating profit for the third quarter down almost 98% on-quarter at just 100 billion won.
Co-chief executive JK Shin apologised to shareholders and said it was "unacceptable" that the company failed to meet its own quality assurance standards.
"Samsung Electronics will revisit and re-examine every step of our engineering, manufacturing and quality control processes," Shin said.
The move is being seen as a coronation of sorts of the 48-year-old Lee, who is already vice chairman of Samsung Electronics and has seen his influence grow since his father, Samsung patriarch Lee Kun-hee, suffered a heart attack and was hospitalised in 2014.
Board chairman Kwon Oh-Hyun said Lee's elevation would give him a greater say in decision-making at the highest level and help foster "long-term, sustainable value" for Samsung shareholders.
Also Read
"We can now say that Lee's regime has officially begun," said Lee Chaiwon, chief investment officer at Korea Value Asset Management Co.
"I think a new era is coming. The company will become more market-friendly," Lee told Bloomberg News.
Samsung's share price rose more than 2% in morning trade, but then fell back to close up 0.4 %at 1.57 million won.
The shareholder meeting began just hours after Samsung announced a third-quarter operating profit of 5.2 trillion won ($4.6 billion) -- down from 7.3 trillion won a year ago.
The slump was in line with a revised earning estimate two weeks earlier after it killed off the Note 7 due to devices overheating and bursting into flames.
The decision to discontinue production of a model aimed at competing with arch-rival Apple's iPhone was a devastating move for the company, which prides itself on the quality production of cutting-edge technology.
Scrapping the Note 7 saw earnings of the core mobile business drop off a cliff, with the mobile division's operating profit for the third quarter down almost 98% on-quarter at just 100 billion won.
Co-chief executive JK Shin apologised to shareholders and said it was "unacceptable" that the company failed to meet its own quality assurance standards.
"Samsung Electronics will revisit and re-examine every step of our engineering, manufacturing and quality control processes," Shin said.