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By Joyce Lee, Cynthia Kim, and Hyunjoo Jin
SEOUL (Reuters) – Lee Kun-hee, who made Samsung Electronics a global powerhouse in smartphones, semiconductors and televisions, died Sunday after spending more than six years in hospital following a heart attack, the company said.
Lee, 78, made the Samsung Group the largest conglomerate in South Korea and became the richest person in the country. 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.
Revenues of 326.7 trillion won ($ 289.6 billion) from Samsung Group affiliates in 2019 accounted for about 17% of South Korea’s gross domestic product, according to data from the Fair Trade Commission and a Reuters calculation.
Lee died with his family by his side, the conglomerate said.
Around 5pm (0800 GMT), Lee’s son Jay Y. Lee, vice president of Samsung Electronics, wearing a face mask, walked into the Samsung Medical Center where a memorial was being held. The area for the memorial was limited to 50 people, a sign said.
The funeral will be a small family affair, Samsung said. He did not say when or where the funeral would be.
Lee’s aggressive bets on new businesses, especially semiconductors, helped grow the conglomerate that his father, Lee Byung-chull, built from a noodle trading business into a global powerhouse with assets worth $ 375 billion. , including dozens of affiliates ranging from electronics and insurance to shipbuilding and construction.
“His legacy will be eternal,” Samsung said in a statement.
The presidential office said South Korean President Moon Jae-in had plans to send condolence flowers to the funeral and send Chief of Staff Noh Young-min and Senior Presidential Secretary Lee Ho-seung to pay their respects on his behalf.
“The leadership he displayed will be a great example and courage for our companies as they overcome the crisis and the challenges that lie ahead amid the difficult times we are going through due to the coronavirus,” President Moon told the Lee family, according to the diary. presidential office.
Lee is the latest second-generation leader of a family-controlled South Korean conglomerate, or chaebol, to die, leaving potentially thorny succession issues 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.”
POTENTIAL RESTRUCTURING
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% of the insurance firm and is Samsung Electronics’ largest individual shareholder with a 4.18% stake.
Jay Y. Lee has been embroiled in legal troubles linked to the merger of two Samsung subsidiaries that helped him 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, on appeal, is scheduled to resume on Monday. A separate trial began this month on charges of accounting fraud and stock price manipulation.
“With Lee’s death, Samsung Group now faces 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, making the most of Lee Kun-hee’s involvement is more important than ever,” Ahn said. “The key here is in taxes. Getting enough inheritance taxes and avoiding potential disputes with your sisters are major hurdles.”
It is unclear how the three sons of the elder Lee and his wife will divide their wealth, an issue that sparked family feuds in other chaebols after the deaths of their patriarchs.
“It has been six years since Lee was hospitalized, so if there is a consensus among the children, Samsung will go through an orderly succession. Otherwise, there is the possibility of a dispute,” said Park Sang-in, a professor at the National University. from Seoul.
The conglomerate 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 breach of trust and embezzlement, but the International Olympic Committee member was pardoned for assisting in the country’s bid for the 2018 Winter Olympics.
“President Lee was a true visionary who transformed Samsung into a leading global innovator and industrial powerhouse for a local company,” said Samsung.
(Information from Joyce Lee, Cynthis Kim, and Hyunjoo Jin; additional information from Dae-woung Kim and Soo-hyun Mah; edited by Miyoung Kim, William Mallard, and Susan Fenton)
