Lee Jae-yong: Samsung’s heir remains trapped in limbo
Lee Jae-yong inherited the reins of the technology giant from his father. His struggles to retain control of the firm – and to stay out of jail – have dogged his every step.
Last month, the heir to South Korea’s mighty Samsung chaebol – a large, family-owned business conglomerate – made a once unthinkable statement. Theoretically signalling the end of three generations of control, Lee Jae-yong said he had no plans to hand management of the empire to his children. In Seoul, where the power of the old chaebol families has become a touch-paper for popular discontent, it was rather as though an unpopular monarch had declared a republic. “The gesture met with scepticism,” says the Financial Times, not least because Lee’s children are still school-age. Indeed, his symbolic concession was probably motivated by rather more pressing problems – like staying out of jail.
Problems pile up
The corruption allegations that have dogged Lee since 2015 just won’t go away. Jailed for five years in 2017, on charges of bribing South Korea’s former president, Park Geun-hye (herself now sentenced to a 25-year term), he secured an early release, but is now fighting retrial on related charges.
Other problems are also piling up. In December, Samsung’s powerful number two, Lee Sang-hoon, was jailed for union-busting. Meanwhile, opponents – ranging from the feared US hedge-fund Elliott Management, to South Korea’s crusading new president Moon Jae-in – are gunning to clean up Samsung’s “opaque culture”. Lee’s supporters claim he has become a scapegoat. But plenty scoff at that, says The New York Times. His father, after all, “was twice convicted of bribery and other corruption charges but never spent a day in jail”. In the eyes of many Koreans, Samsung is still “untouchable”.
In fact, the dynastic heir finds himself in an unpleasant state of limbo. Lee, now 51, spent his apprenticeship under the watchful eye of his “authoritarian” father, “Chairman Lee”. Considered more “approachable” than his father, the younger Lee struggled to reach his father’s “mythical stature” – particularly after an early venture he’d championed, eSamsung, collapsed amid now familiar “accusations that Samsung affiliates had bailed him out”, says The Guardian.
The crashing of worlds
Then, in 2014, Lee’s world came crashing down. After suffering a heart attack, his father fell into a coma and has remained in it ever since, leaving his son a de-facto leader – without funds, says Bloomberg. Chairman Lee is worth around $18bn, but South Korea’s high inheritance-tax rates make it increasingly difficult for founding families to maintain control.
Lee’s alleged criminal behaviour has been shaped by these succession worries, says The New York Times. The family’s “direct equity holding” in the group is less than 5%, making its web of internal cross-shareholdings seem all the more suspicious. And when Lee splashed out on thoroughbred horses for the now-impeached president’s friends, his main motivation was “to obtain the government’s support for moves to tighten his control over the Samsung conglomerate”. Let’s look on the bright side, says Lex in the FT. In 2017, Lee turned out to be quite good at managing the firm from prison: shares in Samsung Electronics surged to a historic high, amid record profits, demonstrating its resilience. However inconvenient for Lee, the possibility of him serving more time “should not panic investors”.