Samsung during and after Lee Kun-hee’s passing Updated: 2020-10-27 16:24:28 KST

Korea’s richest man Lee Kun-hee, who built Samsung into a global giant of smartphones, televisions and computer chips died on Sunday at the age of 78.
He’ll be remembered as Samsung’s big thinker and the provider of grand strategic direction.
He served as chairman of Samsung Group from 1987 until 1998 and then as chief executive of Samsung Electronics until 2008 then he served as Samsung Electronics chairman from 2010 until his death.
In his tenure of some 30 years, Samsung’s market cap jumped nearly 400 fold.
But what lies ahead for the conglomerate after his death?
What will the new governance structure of Samsung look like under the reign of his son and heir Lee Jae-yong?
These are some of the topics we’re looking into today.
Joining us in the studio is SONG Se-ryun, Professor of Law at Kyung Hee University and OH Ji-Yeol , Associate Professor of Finance at Hanyang University.

Before we delve into his succession I want to talk about who Lee Kun-hee was.
There are famous quotes of his that’ve come up in the past couple of days.
One is about innovation in 1993 Lee told his workers to (quote)”change everything but your wife and children” to improve the quality of Samsung products.
That was the moment when Samsung started competing on the global stage and transformed it into the empire that it stands as today So tell us more about Lee Kun-hee.

Samsung is hundreds of times bigger than it was when Lee Kun-hee took over.
Can you help us understand just how big it is? Also, do tell us about the convoluted governance structure that sets Samsung apart from other companies.

Lee Kun-hee and his family used a web of ownership arrangements to exert influence over the other companies under the Samsung umbrella.
Such family business empires, known as chaebol, do this to protect their control but they sometimes go beyond the legal limits.
Lee himself was convicted and pardoned twice for white-collar crimes.
Can you tell us more about that and the issues surrounding these ownership arrangements?

With the succession to speed up now, the focus is on the inheritance Lee Kun-hee is leaving his family.
He leaves behind around 16-billion U.S. dollars worth of Samsung stock.
We know that by accepting all of these assets, Samsung Group’s heir would face nine-billion dollars in inheritance tax alone.
One way to pay it would be to increase dividend payouts. What are some other ways?

Three years ago, Samsung put in place a policy under which it would do more to enhance value for its shareholders.
Samsung’s insurance affiliate was doing that in part by holding shares of Samsung Electronics.
But now that policy could have to change under a revision that will limit insurance companies from putting more than three percent of their assets in stocks.
How is Samsung going to address this?

Lee Kun-hee’s son and heir Lee Jae-yong has been heading the company’s management after his father suffered from a heart attack in 2014.
In that time, we’ve already seen some changes for example, labor unions had not been allowed since the founding of the company, but now that’s changed.
As the new chapter of Samsung’s leadership begins, we expect Lee Jae-yong to show quite a different leadership from his father’s style. Can you tell us more about this.
What kind of governance restructuring do you expect to happen?

Unfortunately, Lee Jae-yong stands accused of stock price manipulation and other offenses as he sought to tighten his control over the major corporate empire.
The heir is currently standing trial in two cases that could take years to reach a conclusion
How debilitating is Lee Jae-yong’s current situation?

Alright. SONG Se-ryun, Professor of Law at Kyung Hee University and OH Ji-Yeol , Associate Professor of Finance at Hanyang University thank you for being with us today. We appreciate it.