The man behind Samsung Group's rise to become the world's largest electronics powerhouse returned to head its flagship unit, two years after being indicted over financial misdeeds.
Lee Kun-hee, who was appointed chairman of South Korea's Samsung Electronics <005930.KS> on Wednesday, said the company founded by his father faced a crisis, and needed new ways to grow.
Lee's return removes what had been an uncertainty for Samsung Group, said Park Yun-chae, research head at Kiwoom Securities.
Under the ownership management, founding family member offers long-term visions that are critical to the group's direction ... he is expected to help Samsung find its long-term goals and plans.
The reappearance of Lee, the country's richest man, has been tipped since he was granted a presidential pardon for tax evasion in December and started discussing a possible return to management at rare public events.
However, some analysts said his appointment was earlier than expected and comes at a time when many see more serious moves to prepare his only son to eventually take over.
While the reclusive Lee, 68, is believed to have retained influence over the group as the head of the founding family, his return with an official title will give the conglomerate clearer direction and stability, analysts said.
Lee expressed concerns over Samsung's future to executives who requested his return, Samsung Group said in a statement.
We're seeing a real crisis right now. Top global companies are falling under. We never know what will happen to Samsung, Lee said. After a decade, most of the products and businesses that represent Samsung today will be gone. There's no time to waste. Let's go forward, only forward.
Samsung Electronics, the world's top memory chip and TV maker, has recovered strongly from a global economic crisis in late 2008 and is leading Japanese rivals such as Sony <6758.T> and Panasonic <6752.T> that it once emulated.
Also the global No. 2 mobile phone producer, Samsung overtook Hewlett-Packard
Analysts polled by Thomson Reuters I/B/E/S forecast a record 13.7 trillion won ($12.1 billion) net profit for Samsung in 2010.
But facing fierce competition in key businesses such as chips and TVs, Samsung Electronics also has to cultivate new revenue sources and is studying areas such as health, environment and renewable energy.
Samsung Group, which employees 277,000 people at home and abroad, also faces other events and challenges this year. Samsung Life Insurance is set to make a $4 billion IPO in May and shipyard arm Samsung Heavy Industries <010140.KS> is still in the midst of the shipbuilding downturn.
Samsung Electronics shares rose 1.24 percent to a two-month high in a flat Seoul market <.KS11>. The stock has risen more than 50-fold since Lee took over from his father in 1987 and is just 4 percent below the all-time high it reached in January.
With the chairman title, Lee is expected to focus on drafting a long-term blueprint for Samsung Group and its flagship Samsung Electronics, company officials said. Samsung Electronics said Lee's appointment will not impact the role of its current CEO Choi Gee-sung.
It could also earn more time for his son Jay Y. Lee, promoted to chief operating officer at Samsung Electronics in December, to be groomed and take over the father's leadership.
Lee owns 3.38 percent of Samsung Electronics with his son and wife also holding less than 1 percent each, small but enough to give the family, through a complex web of cross-shareholding, control over Samsung companies. But Lee's return also raised concerns over transparency.
This sort of decision shows that Samsung is very closed off to outside opinion on how the company should be run...its decisions are being made by a very small group of people encased in its thick walls, said Kim Sang-jo, Associate Professor of Economics at Hansung University.
Kim is also an executive at Solidarity for Economic Reform which is a frequent critic of the country's family-owned conglomerates.
Lee, one of the most influential businessmen, stepped down from as group chairman in April 2008 after being embroiled in a scandal in which group executives were indicted on suspicion of brokering a deal that would give Lee's children a greater stake in the ownership of Samsung Group.
He was cleared of the charge but handed a suspended three-year jail term for tax evasion.
South Korea pardoned him late in December so he could be reinstated as an International Olympic Committee member to help the country's bid for the 2018 Winter Games.
In February, Lee told reporters at a group ceremony he was thinking about returning to management and would do so if Samsung weakened and needed help.
At the event, Lee's latest public appearance in South Korea, he walked with assistance and spoke in a barely audible voice as he praised management philosophy of his late father.
(Additional reporting by Lee Chang-ho, Jungyoun Park, Christine Kim and Jieun Shin; Editing by Jonathan Thatcher and Lincoln Feast)