LEE KUN HEE
Lee Kun-Hee (1942-2020) was chairman of the Samsung Group, Korea's largest chaebol (business conglomerate). He is credited with taking the company — which has interests is everything from consumer electronics to textiles to IT services to amusement parks to speciality materials to insurance, engineering and construction — and shaping it into one of the world’s premier brands and a company that was so big it controlled about 20 percent of the South Korean economy
The third son of the founder of Samsung, Lee Byung-chul, Lee Kun-hee served as chairman of the Samsung Group from 1987 to 2008 and from 2010 to 2020. Under his guidance Samsung became the world's largest manufacturer of smartphones, televisions, and memory chips. He was a member of the International Olympic Committee and was the richest person in South Korea from 2007 to his death in 2020, when his net worth was estimated to be US$21 billion. Lee was ranked among the world’s 100 most influential people by Time magazine in 2005. In 2014, he was named the world's 35th most powerful person and the most powerful Korean by Forbes. [Source: Wikipedia]
Lee Kun-hee was called Chairman Lee at Samsung. Donald Kirk wrote in the Daily Beast: he was “probably Korea’s most admired, if hated, man, leaves his son, Lee Jae-yong, battling the authorities and a legion of lawyers for control of the empire that controls 20 percent of the Korean economy. The world’s biggest smartphone manufacturer has a turnover that exceeds many republics. [Source: Donald Kirk, Daily Beast, October 26, 2020]
Lee died in October 2020 at the age of 78 after spending more than six years in hospital following a heart attack in 2014. According to Reuters: “Lee grew the Samsung Group into South Korea’s biggest conglomerate and became the country's richest person. But he was also convicted of bribery and tax evasion, and he and the empire he built were vilified for wielding huge economic clout, and for opaque governance and dubious transfers of the family wealth. “Lee is such a symbolic figure in South Korea's spectacular rise and how South Korea embraced globalisation, said Chung Sun-sup, chief executive of corporate researcher firm Chaebul.com. [Source: Joyce Lee, Cynthia Kim and Hyunjoo Jin, Reuters October 25, 2020]
In 2016, Forbes estimated Lee’s net worth to be US$14.5 billion. At that time Forbes names him the 14th richest person in technology (up from 19th in 2015), South Korea’s richest person and the 112th richest person in the world.. In 2006 Chairman Lee owned 2.8 million shares of Samsung Electronics. In 2014, he has an estimated net worth of $11 billion, according to the Bloomberg Billionaires Index. At the time of his death in 2020, Forbes estimated he was worth US$20.9 Billion and Reuters said he owned 20.76 percent of Samsung insurance firm and was the biggest individual shareholder of Samsung Electronics with a 4.18 percent stake.
Lee Kun Hee’s Leadership of Samsung
Samsung Electronics shares soared more than 130-fold between the time Lee Kun-hee Lee took over as chairman of Samsung in 1987 and his death in 2020. Simon Mundy wrote in the Financial Times: Samsung Group is not a legal entity, but Mr Lee oversees a co-ordinated strategy for the various Samsung companies, which are linked through a network of cross-shareholdings and constitute the biggest chaebol business group in South Korea. When Mr Lee took control of the company, it was primarily a memory chip producer, with an uncompetitive consumer electronics business that was seen as a secondary concern. [Source: Simon Mundy, Financial Times, May 11, 2014]
“That focus shifted in the late 1990s under Mr Lee and then chief executive Yun Jong-yong, as the company invested heavily in improved product design and aggressive marketing. Samsung became the world’s leading producer of televisions as flat-screen sets came to dominate the market. But the company’s biggest success has been in smartphones, a field in which it recovered from a slow start to become the world’s leading producer by unit sales in 2011. In the first quarter, smartphone sales pushed Samsung’s IT and mobile division to an operating profit of Won6.43tn – 76 per cent of the company total.
“Company officials credit Mr Lee with driving Samsung’s aggressive strategy in fields such as smartphones with repeated admonitions against complacency, in line with the “perpetual crisis” mantra coined by Mr Yun. However, the efforts of Mr Lee and other Samsung officials to ensure a smooth handover to his son have provoked lawsuits and controversy.
Lee Kun Hee’s Early Life
Lee Kun-hee was born on January 9, 1942 in Daegu (Taegu) during the Japanese occupation of Korea. He was the third son of Lee Byung-chul, the founder of the Samsung group, which began in 1938 as trading shop, trucking firm and exporter of fruit and dried fish.
Lee earned a a degree in economics from Waseda University, a private university in Japan. He studied for a masters program in business from the George Washington University in Washington, D.C., but did not get a degree.
Little is about Lee’s early life other than his love for dogs. “Dogs have been a source of great comfort and happiness in my life, so I encourage people to interact more with dogs,” he wrote in an essay published at a local newspaper in 1997. “It was when he was studying in Japan in the 1950s that he realized that a heart-to-heart talk between a man and a dog was possible,” he said. “It was hard for me to get along with school life after I came back from Japan, due to high anti-Japanese sentiment at that time. So I became more attached to dogs.” [Source: Korea Herald]
Family and Children ofLee Kun-hee
Lee Kun-hee was married to Hong Ra-hee, the daughter of Hong Jin-ki, the former chairman of the JoongAng Ilbo and Tongyang Broadcasting Company. The couple had four children: Lee Jae-yong (born 1968), the eldest child and the only son, and three daughters, Lee Boo-jin (born 1970), Lee Seo-hyun (born 1973), and Lee Yoon-hyung (1979–2005) who died by suicide. Each of Lees' four children were sent to the U.S. for some part of their education. Lee’s only son, and heir apparent, Lee Jae-yong, was tapped to take over Samsung. The two living daughters are either executives at major Samsung business groups or are involved in the group’s charities. . [Source: Wikipedia]
Hong Ra-hee is the widow of Lee Kun-hee, She was the director of the Samsung Museum of Art, known as Leeum, and the Ho-Am Art Museum before her resignation in 2017. Hong graduated with adegree in art from Seoul National University. Both museums contain collections from her father-in-law, Samsung founder Lee Byung-Chull. Her father was chairman of one of Korea's largest daily newspapers, JoongAng Ilbo, which is now run by her nephew. One of her brothers, Hong Seok-joh, chairs Korea's biggest convenience-store chain and is also a billionaire. According to Forbes, her estimated worth was US$7.2 billion in 2021
Lee Jae-yong is regarded as the heir to Samsung Electronics. He was born in Seoul and attended Kyungbock High School there. He received his B.A. in East Asian history from Seoul National University and an M.B.A. from Keio University in Japan. He attended Harvard Business School for about five years in pursuit of a Doctor of Business Administration degree, but did not graduate. Jay Y. Lee is the vice chairman of Samsung Electronics and likely to become its chairman. In 2017 he was jailed and charged with bribing a confidante of the now-imprisoned former president, Park Geun-hye, but was released in 2018. He denies any wrongdoing and appealed the case with the Supreme Court.Lee became Samsung Electronics president in 2010 and was named vice chairman in 2012. According to Forbes, his estimated worth was US$12.3 billion in 2021
Lee Boo-jin the eldest daughter, graduated from Daewon Foreign Language High School, a prestigious Korean high school, and earned a bachelor's degree from Yonsei University, where she majored in children's studies. She is president and CEO of Hotel Shilla, a luxury hotel chain, as well as president of Everland Resort, a theme park and resort operator that is "widely seen as the de facto holding company for the conglomerate" according to Associated Press. According to Forbes, her estimated worth was US$4.8 billion in 2021
Lee Yoon-hyung Lee graduated from Ewha Womans University in Seoul with a Bachelor of Arts degree in French language and French literature. She was a first-year graduate student in arts management at New York University at the time she hanging herself in her New York City apartment on November 18, 2005 at the age of 26.
Lee Seo-hyun graduated from the Parsons School of Design in New York and joined Samsung Group's Cheil Industries as a manager in 2002. She oversees the Samsung Welfare Foundation, a charity founded her late father Lee Kun-hee.She also heads the advisory board at The Leeum, Samsung Museum of Art in Seoul. In December 2018, she stepped down as president of the group's fashion division, Samsung C&T, a post she held for three years. According to Forbes, her estimated worth was US$4.5 billion in 2021
Family of Lee Byung Chul: Lee Kun-hee’s Brothers and Sisters
Lee Byung-chul (1910-1987) — Lee Kun-hee’s father — had eight children with his first wife Park Du-eul (1907- 2000), including Lee Kun-hee (1942- 2020), 2nd chairman of Samsung and man who shaped Samsung into the great company it is today, his 3rd son and 7th child.. Lee Byung-chul had two children with second wife: Kuroda (1922-2007).
Lee Byung Chul (1910-1987) — 1st chairman of Samsung.
1st wife — Park Du-eul (1907- 2000)
Lee Byung Chul’s sons by his first wife:
Oldest son, 2nd oldest child — Lee Maeng-hee (1931- 2015) — Founder of CJ Group, which he lost in lawsuit, with Lee Kun-hee).
2nd oldest son, 3rd child — Lee Chang-hee (1933-1991) — Founder of Saehan.
3rd son, 7th child — Lee Kun-hee (1942- 2020) — 2nd chairman of Samsung.
Lee Byung Chul’s daughters:
Oldest child, oldest daughter — Lee In-hee (1929-2019) — The founder of Hansol and spouse of its former chairman, Dr. Cho Wan-hae, M.D. (1925-2019).
2nd oldest daughter, 4th child — Lee Suk-hee (1935-), spouse of LG board director Koo Cha-hak (1930 -), younger brother of the emeritus chairman, Koo Cha-kyung (1925-2019) and paternal uncle of the former deceased chairman, Koo Bon-moo (1945-2018).
3rd daughter, 5th child — Lee Soon-hee (1939-)
4th daughter, 6th child — Lee Deok-hee (1940-), widow of Lee Jeong-gi (1936-2006).
5th daughter, 8th child — Lee Myung-hee (1943-), spouse of Chung Jae-eun (1937-), chairwoman of Shinsegae group and mother of Chung Yong-jin.
2nd wife: Kuroda (1922-2007)
4th son, 9th child: Lee Tae-whi (1947-)
6th daughter, 10th child: Lee Hye-ja (1952-)
Lee Kun Hee’s Brothers and Sisters
Lee Kun-hee had two olders brothers: Lee Maeng-hee and Lee Byung-chul (See Below). Lee Chang-hee died in 1991.
In 1956,Lee Kun-hee's younger sister Lee Sok-hee married into the Keumsungs, the family of powerful Samsung's rival company, LG, but the relationship between the two companies became rocky. Initially it was a happy marriage but relations between the family of Lee Byung-chul and the Keumsungs began to sour when the Keumsung's family business, LG, became one of the biggest electronic sellers in South Korea. Lee Kun-hee's other sisters: Lee In-hee was in charge of Samsung's home-furnishings unit, and Myung-hee, headed Samsung's retail arm. [Source: Business Insider, 2014]
In February 2012 Lee Maeng-hee and his sister Lee Sook-hee initiated legal action against Lee Kun-hee, asking a South Korean court to award them shares of Samsung companies totaling US$850 million,which they claim their father willed to them.
According to Business Insider: Lee Maeng-hee and Lee Sook-hee sought 4.1 trillion won, or $3.54 billion in a lawsuit. They claimed that their father and founder of the empire, Lee Byung-chul, had left a portion of stocks to the two siblings, and Lee Kun-hee had robbed them of their inheritance. According to Bloomberg, the two asked for a quarter of the chairman's stocks in Samsung Life Insurance — worth about $850 million. Samsung life has controlling stock in Samsung Electronics, and the cut would've relegated the chairman to being second-largest shareholder in the insurance company. The controversy stirred up speculation at the time that the Samsung conglomerate would be pulled apart again — though it was quashed when a South Korean judge ruled in Lee Kun-hee's favor. In February 2014, South Korea courts dismissed the case. See Below
Samsung Under Lee Kun-hee’s Brothers in the 1960s
Lee Byung-chul, the patriarch, chose his third son, Lee Kun Hee, in 1971 ahead of two older brothers because they weren’t interested in the business, according to “The Lee Kun Hee Story,” a biography published in 2010. In 1966, a scandal forced Lee Byung-chul to step down. According to the Hankyoreh, a Korean news site, Lee Byung-chul's second son, Lee Chang-hee, smuggled 50 tons of saccharin into the country as construction material. As was tradition in South Korea, his eldest son, Lee Maeng-hee, took over in 1967. [Source: Business Insider, 2014]
Lee Maeng-hee’s leadership style was aggressive. He was disliked by Lee Byung-chul's closest associates. Lee Byung-chul wrote in his memoir that Lee Maeng-hee had thrown Samsung into chaos within six months after taking over as chairman. Around About the same time, second son Lee Chang-hee also made a bid to take the helm of the company by telling the President of South Korea — Park Chung Hee — about his father's slush funds in 1969. That got him kicked out of the family. basically exiled.
Lee Byung-chul suspected that Lee-Maeng-hee's was also involved and thus both Lee Chang-hee and Lee-Maeng-hee had their names were abruptly removed from the succession list in 1969. Lee Chang-hee then left for the U.S. and more or less lived in exile there. father. The Hanyoreh reported that, in "Prince Sado of Samsung," writer Lee Yong-u claimed that Lee Maeng-hee was set up by Lee Byung-chul's advisers, which included Kun-hee's father-in-law.
Samsung itself seemed to do okay in this period. In 1969, the precursor of Samsung Electronic was established and production of a black-and-white television started soon afterwards. A huge burst of growth for Samsung occurred in the burgeoning home electronics business. Samsung Electronics began to export its products for the first time. In 1977 Samsung started to export color televisions. In 1979, the company began mass production of microwave ovens, In the 1970s, Samsung acquired a 50 percent stake in Korea Semiconductor, further solidifying Samsung Electronics' position as a leader in semiconductor manufacturing.
Feud Between Lee Kun Hee and His Older Brother
Choe Sang-Hun, New York Times wrote in the New York Times: Elder brother, Lee Maeng-hee, called his younger brother “childish” and “greedy.” On Tuesday, the Samsung chairman said of his brother: “He says with his own mouth that he is the eldest son of our family, but no one in our family, including myself, regards him as such. In fact, I have never seen him showing up for the family ritual for our father’s anniversary.” That is about the worst thing one can say publicly about a son, particularly the eldest son, of a Korean family in this Confucian society, where the annual rite for deceased ancestors is considered to be the most sacred duty of children. [Source: Choe Sang-Hun, New York Times, April 24, 2012]
“These guys are better than Korean soap operas,” Tom Coyner, a management consultant based in Seoul who is the author of “Doing Business in Korea,” said of the gossip the family feud has inspired. The dispute has become a sensation in a country where the financial elite face growing public scrutiny in an election year and, as Mr. Coyner put it, people still hold a “traditional perception that if you are very wealthy, you got there by illegal means.”
“But Chung Sun-sup, head of chaebul.com, a Web site that specializes in monitoring the country’s family-controlled conglomerates, said there was a reason for Lee Kun-hee to panic, waxing uncharacteristically spiteful against his siblings: They are demanding part of the shares he controls in Samsung Life, the largest South Korean insurance company, which is also the biggest shareholder of Samsung Electronics, the crown jewel of the conglomerate. “Depending on how the court rules or whether the siblings can settle their dispute outside court, this could threaten Mr. Lee’s control of the entire group,” Mr. Chung said. “He must feel like he is standing at the edge of a cliff. No wonder he reacts so sensitively.”
“The accusations of greed flying back and forth between the families of the rich siblings have kept the local gossip mill turning for weeks. “I still cannot forget the shock,” Lee Maeng-hee said in his 1993 memoir, “Buried Story,” recalling a family meeting his father called in 1976, before a cancer operation, where he designated Kun-hee as successor. “By then, a distance had developed between father and me but I still believed that the ultimate power over Samsung would come to me.”
“The feud over the shares of Lee Kun-hee, the Samsung chairman, began in 2007 when a whistle-blower revealed billions of dollars’ worth of shares that Mr. Lee kept illegally under other people’s names. After paying a penalty tax, Mr. Lee transferred ownership of those shares to his own name, turning himself into the biggest shareholder of Samsung Life. Mr. Lee said he had inherited the shares from his father. But in February, his elder brother and an elder sister, Lee Sook-hee, along with offspring of another brother, filed lawsuits claiming that they were entitled to a slice of the inheritance and demanding a total of nearly 1 trillion won, or $877 million, worth of Mr. Lee’s shares.”
Lee Kun Hee Becomes Leader of Samsung
Lee Byung-chul died in 1987. With the two oldest sons — Lee-Maeng-hee and Lee Chang-hee — effectively exiled from Samsung and removed from the succession, third son Lee Kun-hee was ushered in the next chairman. [Source: Business Insider, 2014]
Lee Kun-hee joined the Samsung Group in 1966 with the Tongyang Broadcasting Company, run by his father in law, and later went on to work for Samsung's construction and trading company. He took over the chairmanship of the conglomerate in December 1987, two weeks after the death of his father, Lee Byung-chul. [Source: Wikipedia]
Samsung's core technology businesses had diversified and expanded globally during the late 1970s and early 1980s. Samsung Aerospace Industries (now Samsung Techwin) was launched in February 1987. In 1987, Samsung Advanced Institute of Technology opened for R&D purposes. In 1989 , Samsung BP Chemicals was founded.
In 1988, Samsung Semiconductor & Telecommunications Co merged with Samsung Electronics and home appliances, telecommunications, and semiconductors were selected as core business lines. In 1989, the 20 millionth color TV was produced.
Frankfurt Declaration of Lee Kun-hee
In 1993, after touring Samsung facilities worldwide, Lee Kun-hee was not happy about what he saw. He believed that Samsung Group was overly focused on producing large quantities of cheap often shoddy, low-quality goods. He wanted the company to reorient itself and focus on quality and compete with brands like Sony. Lee famously said, "Change everything except your wife and kids" to encourage innovation and challenge rivals. In a declaration now known as the 'Frankfurt Declaration', he had his executives gathered in the German city Frankfurt in 1993 and during three days of meeting changed the company's approach to quality and developed a strategy to produce results even if it meant lower sales.
Sam Grobart of Bloomberg wrote: “To see how his company was faring internationally, Lee embarked on a world tour in 1993. His findings were not encouraging: A visit in February to a Southern California electronics store revealed Sony and Panasonic TVs in the front window and Samsung TVs gathering dust on a low shelf in the back. Lee was not happy. By June, he’d made it to Germany and was staying at the Falkenstein Grand Kempinski Hotel in Frankfurt. He summoned all of Samsung’s executives — who numbered in the hundreds — to meet him there. “He did this at the drop of a hat, and they all gathered,” says communications chief Lee. On June 7 the chairman delivered a speech that lasted three days (they adjourned in the evenings). The most famous quote to emerge from the address was, “Change everything but your wife and children,” which has “Ask not what your country can do for you” levels of recognition at Samsung. [Source: Sam Grobart, Bloomberg, March 29, 2013]
The event became known, formally, as the Frankfurt Declaration of 1993, with all the United Nations import the name suggests. The content of the Frankfurt Declaration is called New Management, its principles distilled into a 200-page book that’s distributed to all Samsung employees. A stand-alone glossary was later published to define the terms laid out in the first book. Workers who weren’t fully literate were given a cartoon version. Lee went around the globe, evangelizing his gospel to all corners of the Samsung empire. “He conducted a lot of lectures,” recalls Shin. “It comes to 350 hours. We transcribed those events; it took 8,500 pages.”
At Samsung Human Resources Development Center in Yongin, a city about 45 minutes south of Seoul, there is a accurate recreation of drab conference room at the Falkenstein Grand Kempinski Hotel where the Frankfurt Declaration meetings took place. Grobart wrote: “It doesn’t look like much: early 1990s vintage décor and a large table with a fake flower centerpiece. But the Frankfurt Room is to Changjo Kwan as the Clementine Chapel is to St. Peter’s Basilica: an extra-special place inside an already special place. Photography is forbidden; people whisper when inside.....A tour guide proudly notes that everything in the room — including the chairs, drab pink tablecloth, and a painting of Venice — are the originals from the room in the Kempinski when Lee delivered his declaration. Samsung had all the furnishings shipped back to Korea and recreated the room precisely.
In the original room “Chairman Lee gathered his lieutenants and laid out a plan to transform Samsung, then a second-tier TV manufacturer, into the biggest, most powerful electronics manufacturer on earth. It would require going from a high-volume, low-quality manufacturer to a high-quality one, even if that meant sacrificing sales. It would mean looking past the borders of South Korea and taking on the world.”
Division of Samsung Among Family in the 1990s
The early 1990s presented tremendous challenges for high-tech businesses. Mergers, coalitions, and buy-outs were common while competition and consolidation flourished. Companies were pressed to rethink their technology and services offerings. Business began to flow across borders between countries and companies. Samsung made the most of these opportunities by refocusing its business strategy to better respond to market demands.
With Lee Kun-hee presiding, his siblings proceeded to split the empire among themselves. Lee Kun-hee's sisters, Lee In-hee, who was in charge of Samsung's home-furnishings unit, and Myung-hee, who had Samsung's retail arm, split from the company with their departments in 1991 and 1997, respectively. Lee In-hee established the Hansol group, now the country's largest paper manufacturer and electronics producer, while Lee Myung-hee created the Shinsegae Group, Forbes reported.
In 1997, CJ Cheil Jedang, selling food and biopharmaceuticals, separated from the Samsung Group. It was headed by Lee Jay-hyun — Lee Maeng-hee's son. According to Forbes, he was charged with theft and embezzlement, and sentenced to four years in prison in 2014. [Source: Business Insider, 2014]
Lee Kun Hee as the Leader of Samsung
After Lee Kun Hee became leader of Samsung the company quickly grew from a relatively modest and often local-focused company into a powerhouse claiming market shares in many areas of electronics, including televisions, liquid crystal displays and memory chip and, cf course, later, smartphones. Samsung often credits the explosive growth to the “New Management” that grew Frankfurt meeting in 1993. [Source: Jon Fingas, Engadget, October 26, 2020]
Sam Grobart of Bloomberg wrote: “The company immediately prospered under Lee Kun Hee’s leadership. “Between 1988 and 1993, the company had grown two and a half times,” says Shin Tae Gyun, Samsung’s president of the Human Resources Development Center, “so executives thought things were working.” Lee, however, didn’t just want Samsung to be a successful Korean company. He wanted it to be a world player, something on the level of General Electric, Procter & Gamble, and IBM. He even set a deadline: the year 2000. “2000 was not that far away,” says Shin. “At that growth rate, could we become a world-class company in time? The answer was no.”[Source: Sam Grobart, Bloomberg, March 29, 2013]
According to Reuters: “Lee's aggressive bets on new businesses, especially semiconductors, helped grow the conglomerate his father Lee Byung-Chul built from a noodle trading business into a global powerhouse with assets worth $375 billion, including dozens of affiliates stretching from electronics and insurance to shipbuilding and construction. “His legacy will be everlasting," Samsung said in a statement.” [Source: Joyce Lee, Cynthia Kim and Hyunjoo Jin, Reuters October 25, 2020]
Lee Kun Hee’s Management Style
Jon Fingas wrote in Engadget: “The Wall Street Journal noted that Lee often had a hands-on approach, calling emergency meetings to review problems, influencing hiring decisions and launching new products on short notice. He’s well known for a symbolic 1995 move where he ordered workers to burn tens of thousands of devices for poor quality. If Lee felt there was an issue, he’d ramp up pressure until it was fixed. [Source: Jon Fingas, Engadget, October 26, 2020]
Sam Grobart of Bloomberg wrote: “In 1995, Chairman Lee was dismayed to learn that cell phones he gave as New Year’s gifts were found to be inoperable. He directed underlings to assemble a pile of 150,000 devices in a field outside the Gumi factory. More than 2,000 staff members gathered around the pile. Then it was set on fire. When the flames died down, bulldozers razed whatever was remaining. “If you continue to make poor-quality products like these,” Lee Keon Hyok recalls the chairman saying, “I’ll come back and do the same thing.” [Source: Sam Grobart, Bloomberg, March 29, 2013]
At the time of Lee’s death, Ruling party leader and former prime minister Lee Nak-yon praised Lee's leadership, but said, "It can't be denied that he reinforced the chaebol-led economic structure and failed to recognise labour unions."
Donald Kirk wrote in the Daily Beast: Lee Kun-hee “is remembered for berating those around and below him, haranguing them in 10-hour meetings and once simply destroying Samsung products that he said were inferior to those of rivals. The bombastic formal statement issued by Samsung after his death did not overstate his success: “Chairman Lee was a true visionary who transformed Samsung into the world-leading innovator and industrial powerhouse from a local business.”[Source: Donald Kirk, Daily Beast, October 26, 2020]
Lee Kun Hee Treated Like a God
Choe Sang-Hun, New York Times wrote in the New York Times: Lee Kun-hee “is not known for being talkative. Partly because of his reticence, what few public remarks he makes are studied by his reverential employees with the same zeal that devout Christians might apply when parsing biblical quotations. [Source: Choe Sang-Hun, New York Times, April 24, 2012]
"Samsung is a religion, and Chairman Lee is a god." Masaki Oguro, an engineer at Samsung's video camera business in Suwon, South Korea, told Bloomberg. According to Business Insider: Workers were told to park behind the plant because their ugly cars would offend the leader’s eyes. Mints were placed in bathrooms lest anyone’s breath smell of kimchi. Guards lined the road to greet his limo and a long, red carpet was rolled out. Everyone was reminded not to gaze down from the windows. [Source: Jack Dutton, Business Insider, August 28, 2014]
Lee Kun-Hee and the Olympics
Lee Kun-Hee was selected as a member of the International Olympic Committee (IOC) in July 1996. He was a member of the Pyeongchang 2018 bid committee that helped Pyeongchang win its bid to host the 2018 Winter Olympic Games. South Korea had tried two times before to host the Winter Olympics at Pyongchang, and for 2018 was bidding against Munich, Germany and Annecy, France.
Lee was pardoned personally by the South Korean President Lee Myung-bak in 2009, it was said, so could stay on the Korean Olympic Committee and the International Olympic Committee and help direct Pyeongchang 2018 bid. In 2008, Lee had been found guilty on charges of financial wrongdoing and tax evasion.
Chico Harlan wrote in the Washington Post: “It came at a time when President Lee Myung-bak — a former chaebol man who has kept policies in their favor during his five-year term — was pushing South Korea’s bid for the 2018 Winter Olympics. The president thought the chairman, a member of the International Olympic Committee, could help. Once his record was cleared, Lee in 2010 took 11 trips across the world working for the bid. [Source: Chico Harlan, Washington Post, December 11, 2012]
“The town of Pyeongchang eventually won the rights to host the games — a $20 billion boon for the economy, according to one research institute’s forecast. Though South Koreans rejoiced over the selection, the choice did little to soften most citizens’ negative opinion about Lee’s pardoning.
Lee Kun-Hee Loves Dogs
In 1993 Samsung Group launched Korea’s first training school for dogs for guiding the blind, search and rescue, and therapy assistance under the guidance of Lee Kun-hee, well-known for his love of dogs. “Dogs have been a source of great comfort and happiness in my life, so I encourage people to interact more with dogs,” he wrote in an essay published at a local newspaper in 1997. It was when he was studying in Japan in the 1950s that he realized that a heart-to-heart talk between a man and a dog was possible, he said. “It was hard for me to get along with school life after I came back from Japan, due to high anti-Japanese sentiment at that time. So I became more attached to dogs,” he wrote. [Source: Cho Chung-un, Korea Herald, August 30, 2013]
According to the Korea Herald: “Lee himself led efforts to promote international recognition of Korea’s native Jindo dogs in the 1970s. Samsung’s training center still remains the world’s only dog institute that is fully funded by a company, while most other centers are funded by private donation. “The project has helped the visually impaired people increase their independence and mobility with guide dogs. But most importantly, their special partnership has touched many people’s hearts,” said Ha Woo-jong, PR manager for SGDS, which manages the project on commission by Samsung Fire and Marine Insurance. “A growing number of people have started to view dogs as companions,” he added.
“Lee’s affection for dogs may have played a part in shaking off Korea’s controversial image as a “dog-eating country.” Animal activists in Europe were planning to boycott Korean products, followed by a series of reports on Korea’s dog-eating culture in 1988 when the country was hosting the Seoul Olympics. Feeling frustrated, Lee invited members of animal rights organizations in Europe to his residence in Seoul and showed them around the pet industry to prove that Korea is not barbaric as they had thought. A few years later, Samsung started sponsoring Crufts and showcasing its animal welfare programs.
Lee’s efforts to improve the national image also helped his company make inroads into European markets, where animal abuse is taken seriously. In recognition of Samsung’s work on training and breeding guide dogs to serve the blind, Lee received an award from the International Guide Dog Federation in 2002. Lee supported the IGDF’s Seoul meeting in 2002 when the country was preparing for another international sporting event ― the 2002 Korea-Japan World Cup ― and was being attacked by foreign media for its dog-eating culture again.
Samsung and Dogs
Crufts, held annually in the United Kingdom, is the world’s biggest dog show. According to K9 Magazine: If you've ever been to Crufts you'll have no doubt witnessed for yourself the giant commercial installations of the big pet industry brands but have you ever wondered why Samsung, a consumer electronics company, has such a noticeable presence at the event? [Source: K9 Magazine, June 23, 2015]
John Kim, Senior Vice President, Samsung Office of International Relations, explains: “Samsung’s products and services are designed to improve the quality of people’s lives. Thanks to our visionary Chairman, who is a passionate dog lover, we believe that animals, but especially dogs, can significantly enhance the quality of our daily lives and positively enhance our emotional makeup. Events like Crufts is a chance for us to share this belief with UK dog lovers and show them just what Samsung is doing in Korea to bring people and dogs closer together.
“Lee Kun-Hee is a passionate animal lover. With a childhood surrounded by dogs and realising their tremendously positive impact on his formative years, Mr Lee became steadfast in his decision to show his fellow Koreans the value of dogs and their importance on our emotional makeup, just as they had impacted on him. He wanted to establish programmes in Korea to help bridge the gap between people and animals – especially dogs – and educate the public by showing the long-term rewards of responsible pet ownership and the contribution of dogs on all parts of society. From one man’s passion, a new Samsung division — the Samsung Office of International Relations — was established.
“Over the years, staff from this new unit were regularly dispatched to the UK, which Samsung regarded as an epicentre for animal welfare, to learn about specific animal welfare initiatives from top UK organisations and individuals. These organizations included The Animal Health Trust, Guide Dogs for the Blind Association, PRODogs, the RSPCA and Dogs for the Disabled, Search and Rescue Dog Association (SARDA) English Lake District Branch and the West Midlands Police Dog Centre. As a result of these partnerships, Samsung was then able to establish its own similar programmes in Korea.
“Thanks to its investment in research and foreign exchange partnerships with charities and organizations in order to get things right from the start, Samsung has been able to set up the following initiatives in Korea: Samsung Guide Dog School for the Blind- Animal Assisted Therapy (AAT) programme- Pet Ownership Programme- Search and Rescue Dog Centre- Assistance Dog Centre- Riding for the Disabled- Samsung Quarantine Detector Dog Centre
“As the UK has had such a heavyweight impact on the establishment of virtually all seven programmes, events like Crufts provide Samsung with a platform from where the company can update its British friends about the progress and the response to its work. Critically, the company’s special commitment to animal welfare is founded on a philosophy which is now an integral part of the company’s culture and is being warmly embraced by the Korean public.
“As John Kim sums up: “People do question why we are involved with animal welfare and what originated from one man’s personal experience and passion, is now a shared feeling amongst Samsung staff in Korea and helping to change attitudes amongst the Korean public. We are proud that our programmes are a catalyst for change and are helping to nurture an animal loving culture. So much has happened in the past 10-15 years to the animal welfare landscape in Korea and whilst there is always more to be done, as a major player in Korea we are prepared to do our part. Whilst many companies support worthy causes with donations, our methodology is to lead by example, and so we have gone a step further than most by setting up a Samsung unit dedicated to our seven animal welfare programmes, which also includes kennel facilities and training centres.
“Crufts 2005 also saw the first UK appearance of the highly revered Jindo dog, the indigenous Korean breed which is protected by the Korean government and which carries the title of Korean ‘National Treasure’ (number 53), the highest honour given to precious artefacts, animals or people in Korea, on Samsung’s stand. Visitors were able to meet the Jindo first hand, learn about the breed, its heritage and characteristics, as well as Samsung’s efforts to protect and build awareness of the breed both in Korea and in the UK.”
Lee Kun-Hee Rents Three French Alps Ski Slopes
In March 2002, posh French ski resort of Courchevel has reserved three slopes for the exclusive use of Samsung Group chairman Lee Kun-Hee during his three-week stay there. "Lee Kun-Hee is coming for a Samsung seminar. He's learning how to ski and is very worried about his safety," Claude Faure, director of the Societe des Trois Vallees, which manages the slopes at Courchevel, told AFP. Faure said Lee would have exclusive access to three slopes, protected by security nets, for two hours a day between noon and 3 p.m. "This will not in any way disrupt the normal functioning of the station," insisted Faure, whose company also runs the slopes at several other interconnected resorts in the area. [Source: Seoul Times, March 2004]
But the local press lashed out at the decision, with the daily Dauphine Libere, which first revealed the story, saying: "For the first time in France, a station has reserved some of its slopes for a very influential skier." The newspaper said that Lee would be travelling to Courchevel with 80 colleagues and security personnel. Six ski instructors have been hired to work with Lee during his stay in the French Alps. Faure said the slopes reserved for Lee amounted to "two hectares out of a total 540 hectares in the skiing area," but admitted he could not guarantee the slopes would be reopened to other visitors during the unreserved hours.
“Faure acknowledged that renting out slopes for the exclusive use of one person was "a bit of an exception, but countered that the company also rented out slopes for sports and commercial events. "The station is very interested in the Southeast Asian market," Faure said. "We need an opinion maker, like the chairman of Samsung, to promote the Three Valleys ski area. Such luxury doesn't come cheap. Lee will have exclusive access to the ski runs for a maximum of two hours a day — paying euro1,500 (US$2,007) for the first hour and euro1,200 ($1,605) for the second," said Claude Faure, director of the Three Valleys firm that manages the ski area and its lifts.
One of the most cosmopolitan resorts in the world, Courchevel is well placed at the eastern end of the worlds largest lift-linked ski area, the Trois Vallées.“Lee has rented the runs for three weeks, said Faure. Netting will separate his area from other parts of the resort — giving him a total of about 2 hectares (5 acres) of slopes to ski on. He will have a snow scooter to carry him back up the slopes and ferry him back and forth to his four-star hotel, and will have six ski instructors.
Lee Kun Hee Pays for Sex at Home
In July 2016, Korean news outlet NewsTapa reported on Lee Kun (pictured) has been paying for sex at home for years. The Strait Times reported: “NewsTapa aired video clips showing a group of women enter Lee's home in southern Seoul. The dialogue between Lee and the women indicates that illegal sexual services were provided. The women are also shown accepting envelopes that allegedly contained 5 million won (S$5,979) each. [Source: Strait Times, July 23, 2016]
“Further, the report showed that Samsung borrowed the names of high-profile employees to aid the chairman's illicit activities. On July 22, Samsung Group issued a formal statement saying it has nothing to comment, for "it is a personal matter". Samsung also said it was "regretful" that such personal issues are causing a stir.
“NewsTapa did not reveal the identity of those who provided the videos. But it said there was evidence that two people attempted to blackmail Samsung with the videos. The group said it had received the threats, but had not responded. The two - revealed only by their surnames Sun and Lee - were imprisoned for using illegal drugs in 2014, but were released on probation, according to news reports. Their whereabouts have not been confirmed.
Lee Kun Hee’s Legal Problems Troubles
In 1996,Lee Kun-hee was convicted of paying bribes to former presidents Chun Doo-hwan and Roh Tae-woo. He was pardoned by then-President Kim Young-sam in 1997. [Source: Business Insider, 2014]
In 2008, Lee Kun-hee was found guilty again, this time for embezzlement and tax evasion.. Kim Yong-chul, Samsung's chief lawyer, told officials of slush funds owned by Lee Kun-hee, which Lee used to bribe prosecutors, judges, and political figures in South Korea. Kim Yong-chul said the company had trained executives to be scapegoats should the slush fund be discovered. Lee Kun-hee was found guilty of evading $45 million in taxes and was fined about $90 million. It was decided he would go to jail for three years after a five-year waiting period.
Lee resigned as chairman and publically apologized. In a televised mea culpa, Lee, then 66, said, whole flanked by 30 Samsung executives: "I deeply apologise for causing concern to the nation and will take full responsibility for that." His closest confidante at the firm, Lee Hak-soo, as well as his son and heir, Lee Jae-yong, also announced their resignations. "I think it will have a positive impact in the long run because it shows that the chairman is accepting responsibility, which ultimately means accountability," Kim Joongi, a professor of law at Yonsei University in Seoul, told the Associated Press. "And I think that's what's most needed for our largest conglomerates." [Source: Justin McCurry, The Guardian, April 22, 2008]
Lee Kun-hee was allowed to remain free after the judge found his crimes were not serious enough to warrant an immediate prison sentence. The Financial Times reported: Mr Lee was ordered to serve three years behind bars, and fined US$107 million but the prison sentence was suspended for five years. He was found not guilty of the more serious charge of breach of trust. Corporate reform campaigners said the ruling showed Korean business leaders continued to be given preferential treatment. "It is really disappointing," said Kim Sun-woong at the Centre for Good Corporate Governance. "It has become like the norm for tycoons to get suspended jail sentences no matter how serious their crimes are." Prosecutors asked for a seven-year prison sentence for Mr Lee, accusing him of illegal stock-trading with hidden assets. Following a probe into Samsung's finan-ces, prosecutors found $4.5 billion of Mr Lee's personal assets in bank accounts registered in other people's names. But Judge Min Byung-hoon ruled that Mr Lee's illegal actions were "not grave enough to warrant a real jail sentence". The judge also handed suspended sentences and fines to former vice-chairman Lee Hak-soo and former company president Kim In-joo for tax evasion. [Source: Song Jung-a in Seoul, Financial Times, July 17, 2008]
According to Reuters, “analysts and experts had expected Lee to escape prolonged jail time because judges have often been lenient to South Korean corporate leaders convicted of white collar crimes on the basis that putting them behind bars could hurt business. A number of Samsung executives were present in the packed courtroom and showed visible signs of relief when the suspended verdict was read. [Source: Rhee So-eui, Reuters, July 16, 2008]
When this happened, in 2008, Samsung was the largest cellphone producer in the U.S. In 2009, Lee was pardoned by the South Korean President Lee Myung-bak, it was said, so could stay on the Korean Olympic Committee and the International Olympic Committee and help direct Pyeongchang 2018 bid. Pyeongchang won the bid and hosted the Olympics in 2018 and Lee returned to the company in 2010.
Lee Kun Hee’s Last Years
Lee Kun-hee’s final years were marked by debilitating illness. He was treated for cancer and lung disease and got about in a wheelchair. He was treated for lung cancer in 2000 and underwent a procedure to help him get more oxygen after experiencing difficulty breathing the night of May 10, 2014. [Source: Donald Kirk, Daily Beast, October 26, 2020;Cynthia Kim and Jungah Lee, Bloomberg, May 12, 2014]
In May 2014, 72-year-old Lee suffered a heart attack at his home and underwent surgery at Samsung Medical Center after being resuscitated the previous night at Soonchunhyang University Hospital following an acute myocardial infarction.
The Financial Times reported: Lee Kun-hee was admitted to a hospital close to his Seoul home after suffering heart problems, the company said. He was then transferred to a Samsung-operated hospital, where he underwent an operation after being diagnosed with acute myocardial infarction. Mr Lee’s health has declined visibly over the past few years, and he appeared frail in January when he made his annual new year’s address to staff. This has prompted speculation about the timing of his anticipated handover to his son, [Source: Simon Mundy, Financial Times, May 11, 2014]
After that Lee he was hospitalized for six years. During that time there virtually no concrete information on his condition. His only son, Jay Y. Lee, vice chairman of Samsung Electronics, was running the group.
In October 2010, Lee died with his family by his side, Samsung said. According to Reuters: “At around 5 p.m., Lee's son Jay Y. Lee, 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. It did not say when or where the funeral would be. The conglomerate did not specify the cause of death and declined to comment on whether Lee left a will. [Source: Joyce Lee, Cynthia Kim and Hyunjoo Jin, Reuters October 25, 2020]
Image Sources: Wikimedia Commons.
Text Sources: South Korean government websites, Korea Tourism Organization, Cultural Heritage Administration, Republic of Korea, UNESCO, Wikipedia, Library of Congress, CIA World Factbook, World Bank, Lonely Planet guides, New York Times, Washington Post, Los Angeles Times, National Geographic, Smithsonian magazine, The New Yorker, “Culture and Customs of Korea” by Donald N. Clark, Chunghee Sarah Soh in “Countries and Their Cultures”, “Columbia Encyclopedia”, Korea Times, Korea Herald, The Hankyoreh, JoongAng Daily, Radio Free Asia, Bloomberg, Reuters, Associated Press, BBC, AFP, The Atlantic, The Guardian, Yomiuri Shimbun and various books and other publications.
Updated in July 2021