[THE INVESTOR] The “coronation” of Samsung Electronics' Vice Chairman Lee Jae-yong on Thursday as a member of the board of directors was overshadowed by concerns over the Note 7 fallout.

In the morning, shareholders appointed the grandson of the Samsung founder to its board of directors, paving the way for Lee to step up as an official leader of South Korea’s largest conglomerate. Lee did not attend the meeting.

The unanimous vote, however, was soon followed by questions from shareholders over how the company would deal with the Note 7 crisis.

The tech giant was forced to recall its flagship smartphone due to battery issues, causing the company and its affiliate’s extensive losses in terms of cost and brand.

The shareholders also voted in favor of selling off its printer business to HP, but the issue was also outweighed by the Note 7 crisis after one shareholder demanded that someone be made accountable for the fallout.

As shareholders pushed for answers, Kwon, Oh-hyun, a CEO and the chairman of the board of directors, said, “We are still in the process of investigating the real causes. We will take appropriate responsibility once the results come out.”

Following the votes, Shin Jong-kyun, a CEO and board member in charge of the company‘s mobile business, also made comments on the Note 7 incident.

“We are making a thorough investigation to find the real cause. Since we are working with several independent organizations including the US-based UL, it may take a while to get the answers,” Shin said.

The chief admitted that the company had failed to conduct sufficient investigation on the safety of the product after the first recall, choosing instead to hastily launch replacement devices.

Upon reports of the Note 7 explosions, Samsung had said the problem may lie with its batteries and rushed out replacements within a month after it recalled the first problematic phones in early September.

“During the first recall, we only found problems in the batteries made by Samsung SDI and there was no problem with another battery (made by Chinese firm ATL). We should have done a more thorough investigation,” he said.

As the replaced phones also caught fire, speculations ran high that the problem lies in its hardware not its batteries.

Now the company is looking at the smartphone from all fronts including its hardware, software and batteries, the chief said.

During the meeting, there was also a remark that the responsibility for the fallout should be borne by the heir apparent to show “responsible leadership.”

Lee has not made any public remarks over the Note fallout.

“Now that Lee has become a member of the board of directors, he should explain the issue and take responsibility,” Kim Sang-jo, a shareholder and professor at Hansung University, said at the meeting.

“It seems the Note 7 fallout did not only come from technologies, but from the company’s decision-making structure and rigid organizational structure,” he added. 

By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)