Samsung Electronics Co is not letting the arrest of de facto head Jay Y. Lee stop it from considering strategic moves, with the technology giant continuing to evaluate a potential holding company structure.
The idea was first announced in November last year after pressure from activist investor Paul Elliott Singer for changes at the world’s biggest maker of smartphones and TVs.
The proposal included the combination of some businesses under a holding company that would allow Samsung’s founding family to maintain their influence.
“We are conducting a thorough review of the optimal corporate structure, including the possibility of creating a holding company,” Samsung said yesterday in an e-mail. “The process is expected to take a certain period of time and we will provide an update when available.”
Lee, vice chairman of the company and grandson of Samsung Group’s founder, is in detention as he faces charges including bribery and embezzlement, allegations he has denied.
Samsung stocks rose after local media, including Yonhap news agency, quoted Samsung Electronics chief financial officer (CFO) Lee Sang-hoon as saying the company would review shifting its operations into a holding company.
Samsung Electronics yesterday rose 1.9 percent to a record-high close, while Samsung C&T Corp climbed 9.1 percent and Samsung Life Insurance Co gained 4.6 percent
The Lee family has maintained control of the Samsung conglomerate for decades through a complicated web of cross-holdings. It has also faced criticism in recent years that the system stifles competition and undermines corporate governance.
Lee is being accused of bribing a friend of former South Korean president Park Geun-hye in return for government backing of a 2015 merger that helped him tighten his grip on the conglomerate.
Samsung has said court proceedings would reveal the truth, while his lawyers said he has done nothing wrong.
Under the plan, Samsung would split into holding and operating companies, while Samsung C&T, which currently owns more than 4 percent of Samsung Electronics, would be merged into the new holding company, allowing Lee to use his stake in C&T to solidify his position without a massive cash outlay.
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