By Kaden Pradhan
London, United Kingdom
Lee Kun-hee, Chair of South Korea's largest technology conglomerate, Samsung Electronics, has died at 78.
Lee transformed the small family electronics business into a global powerhouse and the world’s largest manufacturer of smartphones and memory cards. Forbes cited him as the wealthiest person in South Korea, with a net worth of $21 billion . He passed away with his family beside him, including his son, Lee Jae-yong, who served as Samsung’s Vice Chair.
After suffering a heart attack, Lee Kun-hee had been bedridden and hospitalized since 2014, with Lee Jae-yong in charge of the company in his stead. Very little was revealed about his life in the six years leading up to his death. “Chairman Lee was a true visionary who transformed Samsung into a world-leading innovator and industrial powerhouse from a local business,” a Samsung company statement said.
The President of South Korea, Moon Jae-in, issued a message of condolence to Lee’s family, alluding to Lee as “a symbol of South Korea's business world” and stating that his leadership would “provide courage to our companies” during the COVID-19 pandemic.
Lee took over as chair of Samsung Group in 1987, after the death of his father, Lee Byung-chul, who had run the corporation since its founding in 1938. At that point, Samsung was a producer of inexpensive electronic parts. However, under Lee’s leadership, many progressive reforms were introduced. He famously told his employees, “Let's change everything...except our wives and kids.”
By the time of his heart attack, Samsung had become a global titan of the electronics sector. Samsung now sells a range of Galaxy phones which rival Apple’s iPhones and Google’s Pixel smartphones. Lee also diversified Samsung Group, as it now provides many other goods and services, like insurance, hotels, theme parks, construction and ship-building. Samsung Electronics now accounts for one-fifth of the market capital on South Korea’s primary stock exchange.
However, Lee’s life was rife with scandals. In 1996, Lee was convicted of bribery of a government official, and in 2008, he was convicted of tax evasion, bribery and illegal share dealings. His sentence was suspended by the courts on both occasions, so he served no jail time. Lee temporarily stepped down from chairing Samsung in 2008, and only returned in 2010 after he was offered a presidential pardon for some of the charges. Later, his son Lee Jae-yong was sentenced to five years in prison for bribery of the president, but his sentence was suspended by an appeals court. Prosecutors indicted him again on similar charges in September.
Samsung was also embroiled in the 2016 ‘Great Scandal’ that led to the impeachment, trial and incarceration of South Korea’s then-president, Park Geun-hye. The company has also been criticized for suppressing the right for workers to form labor unions and ignoring recurrent cases of cancer at some of its factories.
Lee’s death has also resulted in a large reshuffling of the company’s management. With Lee’s passing, Samsung Group is now facing the biggest governance shake-up since the merger between Cheil Industries and Samsung C&T. Ahn Sang-hee, an expert in corporate governance at the Daishin Economic Research Institute, said,“[for Lee Jae-yong,] the key here is with taxes. Coming up with enough taxes related to inheritance and avoiding possible disputes with his sisters are major hurdles.” Park Sang-in of Seoul National University said, “It has been six years since Lee was hospitalised, so if there is a consensus among the children, Samsung will go through an orderly succession. If not, there is a possibility of a feud.” Such a feud could have serious repercussions for Samsung’s future.
The Samsung statement concluded, “All of us at Samsung will cherish [Lee’s] memory and are grateful for the journey we shared with him…his legacy will be everlasting.”