Samsung abandons hereditary system, Lee’s descendants no longer in power

May 9, according to Yonhap news reported that South Korea’s Samsung Electronics Vice President, Samsung Group’s actual boss Lee Held a press conference, the succession process of violations and trade union issues to apologize to all the people, and said that the business management rights will not be handed over to their descendants.

Produced by Sohu Technology

Editing by Zhang Yajun

Samsung abandons hereditary system, Lee's descendants no longer in power

“I will not pass on the management of the company to my children,” Lee said in a nationally televised statement from Samsung’s Seocho Tower. This has always been my idea, but I have been hesitant to share it and make it public. Because I think Samsung is facing an unfavourable business environment at the moment, and it’s inappropriate to talk about management succession issues until my management ability is tested. There will be no further disputes over management succession, no illegal activities, or ethical criticism. I’m just going to focus on doing things that increase the value of the business. “

Mr Lee made it clear that Samsung would allow experienced executives with high expertise and insight to manage the group’s core business. “Only the best management can guarantee Samsung’s growth. This is my sense of crisis. Samsung must employ individuals with proven abilities, regardless of gender, level of education and nationality. They should work hard with greater loyalty and get a better position than I do in managing the group’s core business. “

Public information shows that since the founding of Li Bingxuan in 1938, the Samsung Group has been inherited by the Lee family, to Lee is the third generation. In the late 1980s, Lee died and his third son, Lee Kin-hee, became president of Samsung Group. Lee Washei was admitted to hospital with a sudden heart attack in 2014 and has been in a coma ever since, but remains the group’s president and South Korea’s richest man, with a net worth of 17.6 trillion won. Li, on the other hand, became the actual head of the group. Lee, 52, was appointed vice president of Samsung Electronics in 2012, according to the data. All industries of the Samsung Group are also managed by members of the Lee family.

Sea-Jin Chang, a professor at the National University of Singapore, said Mr Lee’s commitment appeared to be “pragmatic” because South Korea’s estate tax made it increasingly difficult for the founding family to maintain control of their corporate empire.

South Korean law requires estates over $2.5 million to pay 50 per cent inheritance tax, which would be increased from 50 per cent to 65 per cent if the beneficiary became the largest shareholder in a family business. When Lee died, his successors would face nearly $7 billion in inheritance tax. “Li had tried a variety of ways to avoid inheritance tax, but failed. He has realized that it is almost impossible for the next generation to avoid inheritance tax. Zhang Shizhen said.

Park Sang-ying, an economics professor at Seoul National University in South Korea, said Lee’s promise was “a blank cheque, and after twenty or thirty years, there is no way to cash it … I don’t believe it at all. Some critics point out that Mr Li is trying to distract the public from his legal controversy by giving up the transfer of management to his children.

The legal dispute means that Lee, who was sentenced in 2016 for his involvement in South Korea’s then-President Park Geun-hye’s “cronies” affair, was jailed in 2017 and released from prison in 2018, and still faces a high court rehearing and could be sent back to prison.

It is understood that the apology should be made at the request of Samsung Group Compliance Committee. Earlier, according tomedia reports, Samsung Group’s newly formed compliance committee announced on March 11 that it had asked Lee, as Samsung Electronics Vice Chairman and de facto controller of Samsung Group, to issue a public apology for the alleged and proven illegal activities surrounding the group’s succession plan.