On the 25th, the South Korean court handed down its first-instance ruling, sentencing Samsung Electronics' Vice President, Lee Jae-yong, to five years in prison for charges of bribery. Despite his lawyer's statement that an appeal would be filed, Lee Jae-yong may become the first Samsung heir to be imprisoned in 79 years. Joining the company at the age of 23, Lee studied in both Japan and the United States before joining Samsung management at 33. As the third-generation leader of the chaebol, Lee's impressive resume is something most Koreans could only dream of.
In 2014, following his father Lee Kun-hee's sudden coma, Lee Jae-yong took over as the head of Samsung at the age of 46. Over the past three years, Lee appeared poised to succeed his father. However, he has yet to secure a prominent position within the company. His troubles began when he became entangled in the corruption scandal involving former South Korean President Park Geun-hye, leading to his eventual conviction.
The scandals involving chaebol heirs in Korea are often highly publicized, with violations frequently tied to family business succession. Lee Jae-yong was no exception. His status as the potential heir has long foreshadowed the ups and downs of his career.
Born in 1968, Lee Jae-yong is the son of Lee Kun-hee, the second-generation head of the Samsung Group and South Korea's wealthiest individual, and Hong Ra-hee, daughter of the president of the Central Daily. Thanks to his family's wealth, Lee grew up with immense privilege. As the only child, he was groomed from a young age to take over the family business. Despite his prestigious education from Seoul National University and advanced degrees from Keio University and Harvard Business School, Lee has struggled to match his father's legacy.
After returning to Samsung in 2001, Lee maintained a relatively低调profile for the next decade, quietly learning from his father while avoiding the limelight. Unlike his father's more autocratic style, Lee was perceived as more approachable and had a positive public image. However, his reputation took a hit in 1998 when he married the daughter of the chairman of the Elephant Group, South Korea's largest food company, in what was dubbed a "century wedding." Unfortunately, this union ended in 2009 when his wife filed for divorce, seeking a settlement of up to 100 billion won.
Lee Jae-yong's rise to prominence occurred after his father's illness in 2014. Following Lee Kun-hee's hospitalization due to a heart attack, Lee Jae-yong stepped into a leadership role. During the subsequent years, he attempted to revitalize Samsung Electronics by exploring new growth areas such as biotechnology and IT integration. Despite some notable efforts, including strategic acquisitions and divestments, Samsung faced significant challenges, particularly with the Galaxy Note 7's explosive failure in 2016. This crisis severely damaged Samsung's reputation and highlighted the gap between Lee Jae-yong's leadership and his father's.
The pressure to secure his succession led Lee Jae-yong to engage in controversial practices. In 2015, he orchestrated the merger of Cheil Industries and Samsung C&T, increasing his stake in Samsung Electronics. This move was met with criticism, as many questioned whether the merger undervalued assets and prioritized his interests over those of other shareholders. Further complicating matters, revelations emerged linking Samsung to bribes paid to Park Geun-hye's confidante, Choi Soon-sil, to secure government approvals. These allegations ultimately led to Lee's arrest and conviction.
During his trial, despite Samsung's robust legal defense, the court found him guilty. In response to the prosecutor's request for a 12-year sentence, Lee broke down in tears, expressing remorse. This case highlights the difficulties faced by heirs to chaebol dynasties, who often struggle under the weight of family expectations and legal scrutiny.
For many, Lee Jae-yong represents the pitfalls of Korea's chaebol system. High inheritance taxes and complex ownership structures have led to questionable practices, eroding public trust. The recent trial presents an opportunity for Samsung and other chaebols to reconsider their governance models, emphasizing transparency and meritocracy. Whether Samsung remains under Lee Jae-yong's influence from prison, transitions to his sister Lee Boo-jin's leadership, or shifts toward professional management, the future of Samsung remains uncertain.
In the post-Lee Jae-yong era, Samsung faces the challenge of adapting to changing global markets while addressing internal governance issues. The coming years will reveal whether Samsung can maintain its dominance while embracing more democratic and ethical practices.
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