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Lee Kun-hee, who made Samsung Electronics a global powerhouse in smartphones, semiconductors and televisions, died today after spending more than six years in hospital following a heart attack, the company said.
The charismatic leader of the Samsung Group and the richest person in the country, made it the largest conglomerate in South Korea. But he was also convicted of bribery and tax evasion, and he and the empire he built were vilified for wielding enormous economic influence and opaque government and dubious transfers of family wealth.
“Lee is such a symbolic figure in South Korea’s spectacular rise and how South Korea embraced globalization, that his death will be remembered by so many Koreans,” said Chung Sun-sup, CEO of corporate research firm Chaebul. .com.
Lee, who was 78, is the latest second-generation leader of a conglomerate or chaebol controlled by a South Korean family to die, leaving potentially thorny succession problems for the third generation.
The ruling party leader and former prime minister Lee Nak-yon praised Lee’s leadership, but said: “It cannot be denied that he strengthened the economic structure led by the chaebol and did not recognize the unions.”
The death of Lee, with a net worth of $ 20.9 billion according to Forbes, will spark investor interest in a possible group restructuring involving his stakes in key Samsung companies like Samsung Life Insurance and Samsung Electronics.
Lee owns 20.76 percent of the insurance firm and is Samsung Electronics’ largest individual shareholder with a 4.18 percent stake.
Lee’s son, Jay Y. Lee, has been embroiled in legal problems linked to the merger of two Samsung subsidiaries that helped Lee take greater control of the group’s flagship Samsung Electronics.
Young Lee served time in jail for his role in a bribery scandal that triggered the impeachment of then-President Park Geun-hye. The case is on appeal and will resume tomorrow. A separate trial began this month on charges of accounting fraud and stock price manipulation.
“With Lee’s death, Samsung Group is now facing the largest governance shakeup since the merger between Cheil Industries and Samsung C&T” in 2015, said Ahn Sang-hee, corporate governance expert at the Daishin Institute for Economic Research.
“For Jay Y. Lee, getting the most out of that participation that Lee Kun-hee has is more important than ever,” Ahn said. “The key here is in taxes. Generating enough taxes related to that inheritance and avoiding possible disputes with his sisters are the main obstacles. “
It is unclear how the three sons of the elder Lee and his wife will divide their wealth, a problem that has led to family feuds at other chaebols in recent years after the deaths of their patriarchs.
“It’s been six years since Lee was hospitalized, so if there is a consensus among the kids, Samsung will go through an orderly succession. If not, there is the possibility of an enmity, ”said Park Sang-in, a professor at Seoul National University.
“With Lee’s death, Samsung now faces greater uncertainty about the inheritance,” he said.
Lee died with his family by his side, including Jay Y. Lee, vice president of Samsung Electronics, the conglomerate said.
“President Lee was a true visionary who transformed Samsung into the global leader in innovation and industrial powerhouse of a local company,” Samsung said in a statement.
The company did not specify a cause of death and declined to comment on whether Lee left a will.
Lee became president of the Samsung Group in 1987, but had to resign more than a decade after being convicted of bribing the country’s president.
He was convicted again in 2008 for tax evasion and embezzlement, but the International Olympic Committee member was pardoned for assisting in the country’s bid for the 2018 Winter Olympics.
His aggressive bets on new businesses, especially semiconductors, helped turn his father Lee Byung-chull’s noodle trading business into a huge powerhouse with assets worth about $ 375 billion, with dozens of affiliates ranging from electronics and insurance to shipbuilding and construction.
During its lifetime, Samsung Electronics went from being a second-tier television manufacturer to the world’s largest technology company by revenue, eliminating Japanese brands such as Sony Corp, Sharp Corp, and Panasonic Corp in chips, televisions, and displays; ending Nokia Oyj’s mobile phone supremacy and overtaking Apple Inc on smartphones.
“His legacy will last forever,” said Samsung. – Reuters via Malay Mail
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