Samsung's co-CEOs quit in scandal-driven shakeup

Samsung's family line of succession has been broken -- at least temporarily -- in a shakeup that could pave the way for some reform at the scandal-ridden conglomerate.

With the now finalized exit of Samsung Chairman and co-CEO Lee Kun-hee, Lee's son -- long-time heir apparent Lee Jae-yong -- will be sent off to "humble working conditions" overseas instead of jumping into his father's shoes.

After more than 20 years at the Samsung Group -- parent company of Samsung Electronics -- Lee Kun-hee announced at the end of April that he will step down. The resignation followed the senior Lee's indictment on federal charges involving allegations of using a "strategic planning office" at Samsung to hide his assets and illicitly transfer control to his son.

This week, Samsung's other CEO, Yun Jong-yong, also resigned. In addition, Samsung announced that Hwang Chang-gyu, head of Samsung's semiconductor division, will now become CMO. Kwon Oh-hyun, who had been running the non-memory chip business, will take Hwang's place in the semiconductor unit.

Meanwhile, now stepping to the plate as Samsung's CEO is another Lee, who is not a relative of Lee Kun-hee or his son Lee Jae-yong.

The new CEO, Lee Yoon-woo, is a 31-year-old Samsung veteran who previously served as CTO and, prior to that, as chief of Samsung's semiconductor business.

Meanwhile, one-time -- and perhaps still -- heir apparent Lee Kun-hee has been reassigned from his current executive job at Samsung Electronics to work on expanding Samsung's business in emerging markets.

Lee Jr. "will be transferred to an overseas office with humble working conditions to gain field experience and pioneer new markets abroad," according to an article in the Korean publication Dong-A Libo. Lee Sr. does not believe that the 39-year-old Lee Jr. -- who holds a 25 percent stake in Samsung -- is ready yet to be in charge of the company, say other accounts in the Asian press.

But the heir apparent is still widely expected to rise to the top of Samsung's management ranks about five years from now, after the current scandal has faded.

As previously reported in BetaNews, allegations of corruption are nothing new at Samsung. Late last year, federal prosecutors began investigating reports that the Samsung Group compiled $220 million in slush funds to bribe government officials and other influential persons not to examine its management practices.