Samsung Group Chairman Lee Kun-hee Dies at 78 - Yonhap

Daniel Fowler
October 28, 2020

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According to Yonhap, Lee Kun-hee died at a hospital in Seoul on Sunday after being hospitalized for years following a heart attack in 2014.

Under his leadership, Samsung became the world's largest producer of smartphones and memory chips, and the firm's overall turnover today is equivalent to a fifth of South Korea's GDP.

When he inherited the chairmanship of the Samsung group in 1987 - founded by his father as a fish and fruit exporter - it was already the country's largest conglomerate, with operations ranging from consumer electronics to construction.

It is South Korea's largest family-controlled business conglomerate and helped make the nation's economy Asia's fourth-largest.

"Lee Jae-yong may use dividend payouts and his family's financing to pay out the inheritance tax if he receives his late father's stake in Samsung Electronics and Samsung Life Insurance", said Yoo Jong-woo, an analyst at Korea Investment & Securities Co. Samsung described him as a "true visionary" whose trademark "New Management" philosophy announced in 1993 was the "motivating driver of the company's vision to deliver the best technology to help advance global society". Analysts say one such move could involve Samsung C&T buying an affiliate's stake in the tech giant.

However, it has been a turbulent reign, with Jay Y. Lee being sentenced to five years in prison for bribery and offences linked to former president Park Geun-hye.

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A potential restructuring of the group could be on the horizon, as Lee owned 20.76% of the insurance company, Samsung Life, which is the biggest shareholder of the Samsung Group's most important company, Samsung Electronics.

"No one could understand Mr Lee Kun-hee back then, when everyone was trying to sell in big volumes to increase revenue", Prof Chang told The Straits Times. Over a decade later, in 2008, he was found guilty of tax evasion and accused of massive corruption and further tampering of the South Korean government.

The prosecution also indicted Lee last month over his alleged involvement in the 2015 merger of the two Samsung affiliates and fraudulent accounting of a pharmaceutical unit.

Daughters Lee Boo-jin, CEO of Hotel Shilla, and Lee Seo-hyun, who runs the Samsung Foundation, each own stakes in Samsung C&T and Samsung SDS worth about 1.6 trillion won.

He also held a 20.76-percent stake in Samsung Life worth about 2.6 trillion won ($2.3bn), and a 2.88 percent stake in Samsung C&T worth about 564 billion won ($500m) as of Friday's market closing.

"Samsung is still very much a top-down, bureaucratic company, so whether he can take control of Samsung is a big challenge".

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