October 25, 2020 10:18:36 am
Lee Kun-hee, who reworked Samsung Electronics Co. from a copycat South Korean equipment maker into the world’s greatest producer of smartphones, televisions and reminiscence chips, has died. He was 78.
Lee handed away on Sunday along with his household by his aspect, the corporate stated in a press release, with out mentioning the reason for loss of life. His household will maintain a personal funeral. He had surgical procedure in 2014 after a coronary heart assault and was handled for lung cancer within the late Nineties.
Lee, who informed staff to “change all the pieces besides your spouse and youngsters” throughout his drive to foster innovation and problem rivals equivalent to Sony Corp., was South Korea’s richest individual. He had an estimated web price of $20.7 billion, in keeping with the Bloomberg Billionaires Index. Samsung, the most important of South Korea’s family-run industrial teams, often called chaebol, has been led by his solely son for the reason that coronary heart assault.
“Chairman Lee was a real visionary who reworked Samsung into the world-leading innovator and industrial powerhouse from an area enterprise,” the corporate stated. “His legacy shall be eternal.”
The reins are actually set to cross to his solely son Jay Y. Lee, who’s been the conglomerate’s de facto chief since his father’s hospitalization in 2014. Lee is anticipated to finally inherit a $300 billion firm that’s driving a Covid-era growth in on-line exercise. Samsung, the maker of the Galaxy line of smartphones, additionally provides semiconductors for Google’s knowledge facilities and Apple Inc.’s iPhone. It’s the world’s most superior maker of shows for TVs, computer systems and cellular gadgets.
The youthful Lee is presently grappling with two simultaneous authorized disputes with South Korean prosecutors over allegations of bribery and corruption, which he’s repeatedly denied.
Lee Kun-hee’s heirs now face an property tax of roughly $10 billion, and paying it might complicate the household’s management of the Samsung conglomerate — his beneficiaries would seemingly should promote some property to cowl the tax — diluting their stake in Samsung. South Korea’s levy of fifty% on estates of greater than 3 billion received ($2.6 million) is the second-highest amongst nations within the Group for Financial Cooperation and Growth, after Japan.
The Samsung empire consists of 62 corporations. Though the late Lee owned giant chunks of among the companies — together with 4.2% of Samsung Electronics — they’re not sufficiently big to afford management of the conglomerate. The household will depend on casual ties to executives who run associated corporations, and a whole lot of that mushy energy might dissipate with Lee’s loss of life.
It was Lee Kun-Hee who constructed the corporate into the electronics powerhouse of at the moment, changing into synonymous with the rise of South Korea on a world financial stage.
Named one of many world’s 100 most influential individuals by Time journal in 2005, Lee started overhauling Samsung Electronics after he noticed the corporate’s merchandise gathering mud in a Los Angeles electronics retailer, in keeping with “The Lee Kun Hee Story,” a 2010 biography by Lee Kyung-sik. The Suwon, South Korea-based firm had turn out to be identified for affordable, low-quality electronics gear and was within the “second section of most cancers,” sending out 6,000 individuals to repair merchandise made by 30,000 staff, Lee stated in 1993, in keeping with the biography.
The corporate’s makeover began in 1993 when Lee gathered high executives in Germany and laid out a plan, often called the Frankfurt Declaration, to rework Samsung from a second-tier tv maker into an business chief. The corporate’s new mission: create high-quality merchandise, even when it meant decrease gross sales.
Samsung Electronics grew to become the world’s high maker of pc reminiscence chips in 1992, the identical 12 months it grew to become the primary to develop 64-megabyte DRAM chips, in keeping with the corporate.
Lee was born on Jan. 9, 1942, in Daegu about 240 kilometers (150 miles) south of Seoul, and was raised within the close by rural district of Uiryeong, in keeping with the corporate.
In 1938, his father Lee Byung-chull opened a four-story grocery retailer in Daegu that will later turn out to be Samsung Group.
As an adolescent, Lee Kun-Hee appreciated motion pictures and vehicles and stored to himself. He took up wrestling and performed rugby in highschool to struggle loneliness. He graduated with a level in economics from Waseda College in Tokyo and likewise studied enterprise administration within the U.S. at George Washington College in Washington.
In 1971, Lee Byung-chull selected his youngest son to be his successor, and in 1974, the corporate moved into semiconductors when it acquired a 50% stake in unprofitable Hankook Semiconductor. The enterprise turned worthwhile in 1988, helped by dynamic random-access reminiscence chips it produced.
After the Frankfurt Declaration, Lee required staff to reach at work at 7 a.m. as a substitute of their normal 8:30 a.m. begin, so they might “take in reform of their slumber,” in keeping with the biography.
In 1995, he assembled 2,000 staff to look at him make a bonfire out of 150,000 cellphones, fax machines and different firm merchandise that didn’t meet his high quality requirements.
Lee’s cultural change finally produced outcomes. Samsung Electronics surpassed Tokyo-based Sony to turn out to be the highest vendor of flat-screen TVs in 2006, the identical 12 months its market worth exceeded $100 billion.
In 2010, Samsung launched the Galaxy-branded smartphone operating Alphabet Inc.’s Android software program, which helped it cross Apple because the world’s greatest smartphone maker in 2011 by way of models offered. By introducing the Galaxy Be aware in 2011, Samsung created a brand new product area of interest often called the phablet, a smartphone-tablet hybrid.
Samsung grew to become the most important vendor of all cellphones in 2012, unseating Nokia Oyj, which had been the business chief for greater than a decade. Its success in smartphones then boosted income at its part companies, together with reminiscence chips, show and processors.
Lee’s profession was additionally notable for its setbacks and controversies. An growth into the automobile enterprise was unsuccessful. Samsung Motor Inc. rolled out its first vehicles in 1998 and failed to draw consumers. The unit was positioned into receivership and Renault SA bought a majority stake in 2000.
Lee was mired in political scandals within the late Nineties after being convicted of paying bribes to former president Roh Tae-woo in 1996. He was pardoned by President Kim Younger-sam a 12 months later.
In 2009, Lee was discovered responsible of tax evasion and breach of responsibility for inflicting losses at Samsung SDS Co., an info know-how companies supplier, as a result of he knew the corporate illegally offered bonds with warrants to his son at artificially low costs. He was fined 110 billion received and acquired a suspended three-year jail sentence.
4 months after the 2009 ruling, South Korea’s then-President Lee Myung-bak pardoned Lee, a member of the Worldwide Olympic Committee, so he may assist the nation’s profitable bid to host the 2018 Winter Olympics in Pyeongchang.
Lee, who resigned from the board of Samsung Electronics in 2008 amid the controversies, returned as chairman in March 2010, telling staff the enterprise was “going through an actual disaster.”
“In 10 years, nearly all of merchandise that signify Samsung might now not exist,” he stated in a press release saying his return. “We will need to have a brand new begin. There is no such thing as a time to hesitate.”
Two months later, Samsung Group stated it could make investments 23 trillion received to develop in areas equivalent to well being care and photo voltaic batteries by 2020.
Lee’s son, Jay Y. Lee, grew to become vice chairman of Samsung Electronics in December 2012 and his daughter, Lee Boo-jin, is president of Resort Shilla Co., a Samsung affiliate, elevating considerations that the founding household would keep its grip on the conglomerate on the expense of minority shareholders. That problem lies on the coronary heart of the 2 authorized disputes the youthful Lee is now embroiled in.
In August 2019, the Supreme Court docket ordered the retrial of Jay Y. Lee over bribery expenses that voided an earlier resolution to droop Lee’s 2.5-year jail sentence. A particular prosecutor had indicted the Samsung inheritor on expenses of bribing a buddy of former President Park Geun-hye in return for presidency backing for a merger that helped cement his management over Samsung whereas his father was hospitalized.
In 1967, Lee Kun-hee married Hong Ra-hee. Along with kids Jay Y. and Boo-jin, he had a daughter, Lee Search engine marketing-hyun. One other daughter, Lee Yoon-hyung, died in 2005 at age 26.
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