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Behind bars, Samsung scion Lee sees his wealth top $2 billion

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10/13/2017 | 12:43pm CEST
Samsung Electronics Vice Chairman, Jay Y. Lee, arrives at a court in Seoul

Jay Y. Lee, the billionaire heir to South Korea's Samsung Group, should find some comfort that its crown jewel Samsung Electronics Co Ltd has reported record profit every quarter since he was jailed in February, making him even richer.

Detained over charges that he bribed former president Park Geun-hye, Lee has since missed the launch of two new flagship phones and three record-breaking quarterly earnings, including July-September earnings guidance on Friday.

He will also be briefed that his top lieutenant and chief executive of Samsung Electronics, Kwon Oh-hyun, has decided to step down to make way for a new leader.

Kwon, who was expected to take a bigger role following Lee's arrest and the departures of other key executives in the wake of the bribery scandal, made the surprise announcement on Friday when Samsung also forecast record quarterly profit on the back of the memory chip business.

While Lee is unable to do much to minimise a leadership vacuum at one of the world's biggest technology firms, the 49-year-old Samsung scion will get some solace that Samsung is chugging along without him.

He may also like to know his wealth, in terms of his stake in Samsung Electronics, has increased by at least 45 percent since his arrest.

His Samsung Electronics stake, albeit below one percent, is now worth 2.3 trillion won (1.53 billion pounds). Lee also received at least 11.8 billion won ($10.5 million) in dividends from Samsung Electronics during his detention, and 837 million won in pay during the first half of 2017. He owns stakes in other Samsung affiliates.

He will miss another record earnings announcement expected in the fourth quarter as he is expected to stay in prison at least until February, when the appellate court hearing his case is likely to try to rule on the bribery suit.

While some investors worry about a prolonged leadership vacuum, and Kwon warned that Samsung was struggling to find new growth engines, others seem more sanguine.

"I think Samsung has a firm system to run the company even in the absence of its head, as we saw from the case of both Lee Kun-hee and (his son) Jay Y. Lee," said a fund manager who owns Samsung shares, referring to the Samsung Group patriarch who was incapacitated in 2014 following a heart attack.

"Someone will replace him somehow. It's just like Apple doing fine even after Steve Jobs," he said, declining to be named as he was not authorised to talk to the media.

(Reporting by Joyce Lee; Additional reporting by Dahee Kim; Editing by Stephen Coates)

By Joyce Lee

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