Samsung Group Vice Chairman Lee Jae-yong continued his newest worldwide tour with China, having met top officials from Huawei and Xiaomi last week, The Korea Herald’s Investor reports, citing sources familiar with the matter. Mr. Lee, who goes by Jay Y. Lee in the West, hasn’t made a public appearance since being released from prison in February following a year in detention. While originally sentenced to a five-year term for his alleged role in a concentrated effort to bribe top government officials and enable a merger of two Samsung affiliates in 2015, he ended up being released on a suspended sentence by a second-instance Seoul court.
Mr. Lee has been touring the world on business ever since, brainstorming ideas with IT industry leaders regarding long-term strategy, sources claimed earlier this spring. While initially expected to return to South Korea by April, his tour ended up being prolonged on several occasions and it’s still unclear when the de facto heir of the Far Eastern country’s largest conglomerate will officially retake the reins of the company, provided he intends to do so. Samsung is presently said to be in a process of streamlining its corporate structure by selling some Samsung Electronics stock held by its affiliates controlled by the founding Lee family so as to weaken Mr. Lee’s grasp over the firm and improve shareholder value. Mr. Lee himself is said to be pushing for such a move and is content with its effects.
Investors have long been claiming Samsung Electronics shares are severely undervalued in part due to that circular shareholding structure and the founding family’s unwillingness to sell them, i.e. allow them to circulate. The Seoul-based chaebol is expected to pursue major M&A deals once Mr. Lee officially returns to the company, though the contents of his meetings with Huawei and Xiaomi officials remain unclear, with sources claiming the general purpose of his China visit is to strengthen its ties with local partners. Samsung‘s smartphone business today amounts to less than one-percent of China’s market, whereas the company has been leading the segment five years ago, though it remains the world’s largest smartphone vendor in terms of both shipments and sales, according to numerous industry trackers.