SEOUL, South Korea: Lee Kun-Hee, the ailing president of Samsung Electronics that transformed the small TV maker into a global consumer electronics giant, has passed away. He was 78 years old.
A statement from Samsung said Lee died Sunday with members of his family, including his son and the company’s de facto director, Lee Jae-yong, at his side.
Lee Kun-Hee had been hospitalized since May 2014 after suffering a heart attack and the young Lee has run Samsung, South Korea’s largest company.
“All of us at Samsung will cherish his memory and are grateful for the journey we share with him,” the statement from Samsung said. “Our condolences go out to his family, relatives and those closest to him. His legacy will be eternal.”
Lee Kun-hee inherited control from his father and during his nearly 30 years of leadership, Samsung Electronics Co. grew into a global brand and the world’s largest manufacturer of smartphones, televisions, and memory chips. Samsung sells Galaxy phones at the same time that it makes the displays and microchips that power its rivals, Apple’s iPhones and Google’s Android phones.
Samsung helped make the nation’s economy the fourth largest in Asia. Their businesses encompass shipbuilding, life insurance, construction, hotels, amusement park operation, and more. Samsung Electronics alone accounts for 20% of the market capital in the main South Korean stock market.
Lee leaves behind immense wealth, and Forbes estimates his fortune at $ 16 billion in January 2017.
His death comes at a difficult time for Samsung.
When he was hospitalized, Samsung’s once lucrative mobile business faced threats from upstart manufacturers in China and other emerging markets. There was a lot of pressure to innovate its traditionally strong hardware business, reform a stifling hierarchical culture, and improve its corporate governance and transparency.
Samsung was caught in the 2016-17 corruption scandal that led to the then president Geun-hye ParkPolitical trial and imprisonment. Its executives, including the young Lee, were investigated by prosecutors who believed Samsung executives bribed Park to secure government backing for a smooth leadership transition from father to son.
In an earlier scandal, Lee Kun-Hee was convicted in 2008 of illegal stock trading, tax evasion and bribery designed to pass his wealth and corporate control over to his three children.
The late Lee was a stern and terse leader who focused on overarching strategies, leaving the details and day-to-day management to the executives.
Its near-absolute authority enabled the company to make bold decisions in the rapidly changing technology industry, such as shelling out billions to build new production lines for memory chips and display panels, even as the global financial crisis of 2008. Those risky moves fueled Samsung’s rise.
Lee was born on January 9, 1942 in the city of Daegu, in the southeast of the country, during the Japanese colonial rule of the Korean peninsula. His father, Lee Byung-chull, had founded an export business there in 1938 and, after the 1950-53 Korean War, transformed the company into an electronics and appliance manufacturer and the country’s first major trading company.
Lee Byung-chull was often called one of the fathers of modern industrial South Korea. Lee Kun-Hee was the third child, and the inheritance of his father’s businesses contradicted the tradition that family wealth went to the eldest. One of Lee Kun-Hee’s brothers sued for a larger share of Samsung but lost the case.
When Lee Kun-Hee inherited control from his father in 1987, Samsung relied on Japanese technology to produce televisions and was taking its first steps in the export of microwaves and refrigerators.
The company was expanding its semiconductor factories after going into business in 1974 by acquiring a near-bankrupt company.
A watershed moment came in 1993. Lee Kun-Hee made sweeping changes at Samsung after a two-month trip abroad convinced him that the company needed to improve the quality of its products.
In a speech to Samsung executives, he famously urged, “ Let’s change everything except our wives and children. ”
Not all his moves were successful.
One notable failure was the group’s expansion into the auto industry in the 1990s, partly fueled by Lee Kun-Hee’s passion for luxury cars. Later, Samsung sold Samsung Motor almost bankrupt to Renault. The company was also frequently criticized for not respecting labor rights. Cancer cases among workers in its semiconductor factories were ignored for years.
In 2020, Lee Jae-yong declared that inheritance transfers at Samsung would end, promising that the management rights he inherited would not pass to his children. He also said that Samsung would stop cracking down on employees’ attempts to organize unions, although labor activists questioned his sincerity.
South Koreans are proud of Samsung’s global success and concerned that the company and the Lee family are above the law and have influence in almost every corner of society.
Critics note in particular how Lee Kun-Hee’s only son earned immense wealth through unlisted shares in Samsung companies that were later made public.
In 2007, a former lawyer for the company accused Samsung of wrongdoing in a book that became a bestseller in South Korea. Later, Lee Kun-Hee was charged with tax evasion and other charges.
Lee resigned as president of Samsung Electronics and was found guilty and sentenced to three years in prison with suspension. He received a presidential pardon in 2009 and returned to Samsung’s management in 2010.
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