By Joyce Lee, Cynthia Kim and Hyunjoo Jin
SEOUL (Reuters) – Lee Kun-hee, who constructed Samsung Electronics into a world powerhouse in smartphones, semiconductors and televisions, died on Sunday after spending greater than six years in hospital following a coronary heart assault, the corporate mentioned.
Lee, who was 78, grew the Samsung Group into South Korea’s greatest conglomerate and have become the nation’s richest particular person. However he was additionally convicted of bribery and tax evasion, and he and the empire he constructed have been vilified for wielding large financial clout, and for opaque governance and doubtful transfers of the household wealth.
“Lee is such a symbolic determine in South Korea’s spectacular rise and the way South Korea embraced globalisation, that his demise might be remembered by so many Koreans,” mentioned Chung Solar-sup, chief government of company researcher agency Chaebul.com.
Samsung Group associates’ 326.7 trillion gained ($289.6 billion) in 2019 income was price about 17% of South Korea’s gross home product, in keeping with Honest Commerce Fee knowledge and a Reuters calculation.
Lee died together with his household by his facet, the conglomerate mentioned.
At round 5 p.m. (0800 GMT), Lee’s son Jay Y. Lee, vice chairman of Samsung Electronics, sporting a face masks, walked into the Samsung Medical Middle the place a memorial was being held. The realm for the memorial was restricted to 50 folks, an indication mentioned.
The funeral might be a small household affair, Samsung mentioned. It didn’t say when or the place the funeral could be.
Lee’s aggressive bets on new companies, particularly semiconductors, helped develop the conglomerate his father Lee Byung-chull constructed from a noodle buying and selling enterprise into a world powerhouse with property price $375 billion, together with dozens of associates stretching from electronics and insurance coverage to shipbuilding and development.
“His legacy might be eternal,” Samsung mentioned in a press release.
The presidential workplace mentioned South Korean President Moon Jae-in had plans to ship condolence flowers to the funeral, and ship chief of workers Noh Younger-min and senior presidential secretary Lee Ho-seung to pay respects on his behalf.
“The management he confirmed might be an ideal instance and braveness for our corporations as they overcome the disaster and challenges forward amid tough occasions we’re underneath because of the coronavirus,” President Moon was quoted as saying to the Lee household, in keeping with the presidential workplace.
Lee is the newest second-generation chief of a South Korean family-controlled conglomerate, or chaebol, to die, leaving probably thorny succession points for the third era.
Ruling get together chief and former prime minister Lee Nak-yon praised Lee’s management, however mentioned, “It might’t be denied that he bolstered the chaebol-led financial construction and didn’t recognise labour unions.”
The demise of Lee, with a internet price of $20.9 billion in keeping with Forbes, is about to immediate investor curiosity in a possible restructuring of the group involving his stakes in key Samsung corporations equivalent to Samsung Life Insurance coverage and Samsung Electronics.
Lee owns 20.76% of the insurance coverage agency and is the largest particular person shareholder of Samsung Electronics with a 4.18% stake.
Jay Y. Lee has been embroiled in authorized troubles linked to a merger of two Samsung associates that helped him assume larger management of the group’s flagship Samsung Electronics.
The youthful Lee served jail time for his position in a bribery scandal that triggered the impeachment of then-President Park Geun-hye. The case, being heard on enchantment, is scheduled to renew on Monday. A separate trial on prices of accounting fraud and inventory worth manipulation kicked off this month.
“With Lee passing, Samsung Group is now dealing with the largest governance shake-up for the reason that merger between Cheil Industries and Samsung C&T” in 2015, mentioned Ahn Sang-hee, a company governance professional at Daishin Financial Analysis Institute.
“For Jay Y. Lee, getting probably the most of that stake Lee Kun-hee holds is extra vital than ever,” Ahn mentioned. “The important thing right here is with taxes. Developing with sufficient taxes associated to inheritance and avoiding attainable disputes together with his sisters are main hurdles.”
It stays unclear how the elder Lee’s three kids and his spouse will break up his wealth, a difficulty that led to household feuds at different chaebols after the deaths of their patriarchs.
“It has been six years since Lee was hospitalised, so if there’s a consensus among the many kids, Samsung will undergo an orderly succession. If not, there’s a chance of a feud,” mentioned Park Sang-in, a professor at Seoul Nationwide College.
The conglomerate didn’t specify the reason for demise and declined to touch upon whether or not Lee left a will.
Lee grew to become Samsung Group chairman in 1987 however needed to resign greater than a decade later after being convicted of bribing the nation’s president.
He was convicted once more in 2008 of breach of belief and embezzlement, however the long-time member of the Worldwide Olympic Committee was pardoned to assist the nation’s bid for the 2018 Winter Olympics.
“Chairman Lee was a real visionary who remodeled Samsung right into a world-leading innovator and industrial powerhouse from a neighborhood enterprise,” Samsung mentioned.
(Reporting by Joyce Lee, Cynthis Kim and Hyunjoo Jin; extra reporting by Dae-woung Kim and Soo-hyun Mah; Modifying by Miyoung Kim, William Mallard and Susan Fenton)