A major technology firm just nominated the son of its longtime chairman to the board after the company suffered its steepest decline in stock value in almost a decade.
The Korean phone maker lost $22 billion in market value in one day after reports surfaced that their Galaxy Note7 phones were exploding and catching fire, according to Bloomberg. (RELATED: Samsung’s Galaxy 7 Recall Is Happening At The Worst Possible Time) The company instituted a global recall of some 2.5 million Note7 phones just days before the iPhone 7 release.
Samsung Electronics Corporation nominated Lee Jae-yong to its board of directors to take a more active role in management during the crisis, the Wall Street Journal reports. Jae-yong’s father, Lee Kun-Hee, suffered a heart attack in 2014 that left Samsung’s chairman incapacitated during the largest crisis facing the company in over a decade.
The company released a statement saying the time is “now right to nominate Jay Y. Lee as a member of the Board to allow him to take a more active role in the Company’s strategic decision-making,” during this arduous and uncertain period for the company. Samsung notes Lee’s extensive “experience as a business leader over many years,” and that he has “made important contributions to the success of Samsung Electronics.”
Korean custom stands in the way of Lee Jae-Yong taking over the company until his father passes away, Bloomberg reports.
Park Ju Gun, president of a corporate watchdog group in Korea, says that the move to elevate Lee Jae-yong to the board is “a signal that Samsung needs strong leadership in the midst of risk and uncertainty,” Bloomberg reports. “By showing the markets that he’s assuming responsibility, Lee Jae Yong may be seeking to take a step forward in the succession,” Park says.
Lee will have more than just the Note7 Model to occupy his time. A recent case shows that it isn’t just the Note7 that is exploding and catching fire, and these episodes are not just happening while charging. One Ohio man received 3rd degree burns and a skin graft surgery from his Galaxy S7 Edge exploding into flames inside his pocket. (RELATED: These Pictures Show The Horrifying Result Of Samsung’s Phone Explosions)
Furthering complications, investors have dumped stocks by the boatload, shedding $15.9 billion off Samsung’s market value alone on Monday, the WSJ reports. The stock closed 7 percent down on Monday, marking the largest single-day drop for the company since 2008.
Investors aren’t the only party expressing concerns, regulators and airlines have told customers to immediately stop using Note7 devices on airplanes.
Lee is still awaiting approval from the board.
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