Samsung Heir Shockingly Vows To End The Dynastic Control Of The Family Company. Lee Jae-yong, the de facto head of the family business Samsung, revealed that he did not intend to hand over the management of the conglomerate to his children. This would end the South Korean chaebol practice of dynastic control of a family business. To be clear, a chaebol is a large industrial conglomerate led and controlled by an owner or a family in South Korea. A chaebol is often made up of numerous diversified subsidiaries, controlled by an owner whose power over the group often exceeds legal authority. It seems that Lee’s decision is an effort to put recent scandals behind him and Samsung by ending the dynastic scheme.
Samsung Heir Shockingly Vows To End
Lee, you may remember, was arrested a few years ago for corruption. In August 2017, Lee Jae-yong was convicted of offering bribes to former South Korean President Park Guen-hye and close friend of Park Choi Soon-sil in exchange government favors for Samsung. Samsung has donated nearly $ 70 million to two charities controlled by Choi Soon-sil. The company also transferred millions to a German company in Choi, which funded her daughter’s horse training and her niece’s winter sports center. The resulting outrage led to Park’s dismissal as president. Lee was also convicted of embezzling money from Samsung, hiding assets abroad, concealing profits from criminal activity and perjury. Lee was released from prison in February 2018. He was sentenced to two and a half years in prison suspended.
Lee became acting chief of Samsung based in South Korea in 2014 after his father Lee Kun-hee suffered a heart attack. Some South Koreans call the country the “Republic of Samsung” because the company has a big influence on everything from exports to healthcare. Nearly 60 Samsung affiliates represent a third of the South Korean stock market. The company was founded by Lee’s grandfather in 1938.
Lee apologized for the bribe scandal and the effort to cancel the unions at Samsung. He also said that he had been considering the decision to end the company’s dynastic control for some time. It also decided that employees could organize, bargain collectively and organize peaceful meetings. This means that Samsung will be led by professional managers who are hired for their experience and talent rather than being part of the Lee family. The 51-year-old said he will not pass on leadership to his daughter and son, who are still in their teens and early 20s.
It is a revolutionary decision for a South Korean conglomerate because of the culture’s dependence on a dynastic chaebol for generations. Samsung has remained under the control of the founding Lee family for three generations. It remains to be seen whether other South Korean conglomerates will follow suit, but this at least indicates the beginning of the end for the cultivation of the haves and have-nots in South Korea.