The absence of Samsung Electronics Co.’s Vice Chairman Jay Y. Lee, also Samsung Group’s de facto heir, could affect operation of the world’s largest smartphone and semiconductor manufacturer in the long term, said Kwon Oh-hyun, another vice chairman and chief executive of Samsung Electronics.

“(The absence of Lee and his imprisonment) is kind of a tragedy,” Kwon said during a question and answer session led by David Rubenstein, founder and chief executive of The Carlyle Group and president of the Economic Club of Washington D.C., at an event hosted by the Economic Club in the United States on Thursday (local time). “(Samsung Electronics’) business itself is going well today,” but the company would need some advice on its long-term plan, which “in that sense, we have some handicaps right now,” Kwon said. He did not further discuss the matter because Lee’s trial is ongoing.

In August, Lee was sentenced to five years in prison on bribing Korea’s former President Park Geun-hye’s confidante in return for help in succeeding his father. He immediately appealed denying the charges, and the High Court began the appeal trial this month.

Despite the chief’s imprisonment, Samsung Electronics last week projected that it would have raised 14.5 trillion won ($12.8 billion) in operating income for the third quarter ended September, nearly tripling from a year ago and another record-high quarterly profit thanks to a prolonged boom in the global semiconductor industry. Its previous higest operating income was 14.1 trillion won in the second quarter.

At the pinnacle of the company’s success, Kwon, who has been leading the Korean tech giant on behalf of Lee, made a sudden announcement to step down from management, surprising the industry and financial markets. Answering to a question about what has motivated him to make the decision, Kwon simply cited an old Korean proverb saying that “it’s best time to leave when you’re in the peak.”

Samsung Electronics was just a modest, local company when he first joined the company in 1985, but it has taken a great leap over the last 30 years to become a global tech mogul now, Kwon said, adding that it is time for him to retire with much pride. The de facto chief of the electronics giant since the arrest of Samsung scion Lee earlier this year is partly credited for the huge success of the company’s component business. He has been vice chairman of Samsung Electronics since 2012.

After retirement, Kwon wants to take on a mentoring role for young people and their startups, he said. His resignation will take effect at the end of his board term in March 2018. Kwon said he can recommend his successor, but the board will make a final decision.

As the chief of the world’s largest smartphone maker, Kwon did not hesitate to say the company’s phone is the best in terms of hardware. But also he admitted that Apple Inc.’s iPhone is “a little better” than Samsung Galaxy in terms of service and others. What would he recommend? “It depends on your taste,” he answered to the question from Rubenstein, noting that it’s like asking him to choose between sushi and kimchi.

After working at a tech company for three decades, Kwon shared challenges every tech company is facing in the fast changing environment of the information technology (IT) industry. “As you know, the IT industry is changing so fast that nobody can expect what would happen in the next 10 years,” Kwon said. To survive and sustain business for the long term, the two basic but utmost goals of a corporate, Samsung Electronics should keep seeking for best solutions to “how to change our corporate culture and mentality and how to educate the talent.”

Kwon attended the Economic Club of Washington D.C. and gave a brief speech before he had the interview session of the club’s president Rubenstein. The Economic Club is a non-profit corporation established in 1986 with the aim of sharing insights of global issues. The club has about 700 members including Samsung Electronics, Google Inc., Amazon.com Inc., Boeing Company, ExxonMobil Corp., Time Warner Inc., and Citigroup Inc.

By Lee Jin-myung and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]