Lee Kun-hee

2.1. Birth and Family Background

Lee Kun-hee was born on January 9, 1942, in Ingyo-dong, Jung-gu, Daegu, during the period of Korea under Japanese rule. He was the third son of Lee Byung-chul, the founder of the Samsung Group, which initially began as a small enterprise exporting fruits and dried fish. His mother was Park Du-eul.

His family lineage was deeply rooted in the burgeoning South Korean business landscape. His paternal grandparents were Lee Chan-woo (1879-1957) and Kwon Jae-rim (1881-1959). He had numerous siblings: older sisters Lee In-hee (1929-2019), Lee Sook-hee (1935-), Lee Soon-hee (1939-), Lee Deok-hee (1940-), and Lee Myung-hee (1943-); and older brothers Lee Maeng-hee (1931-2015) and Lee Chang-hee (1933-1991). He also had half-siblings Lee Tae-hwi (1947-) and Lee Hye-ja (1952-) from his father's second wife, Kuroda.

His father, Lee Byung-chul, who himself had studied at Waseda University in Japan, encouraged Lee Kun-hee to gain international exposure. Consequently, from the age of 10 in 1953, Lee Kun-hee spent three years attending school in Tokyo, Japan, to experience and learn from an advanced nation. This early exposure to Japan and its business culture would significantly influence his later management philosophy.

2.2. Education and Study Abroad

Lee Kun-hee completed his early education in South Korea, graduating from Busan National University of Education Affiliated Elementary School in 1954, Seoul National University Affiliated Middle School in 1957, and Seoul National University Affiliated High School in 1960. He briefly attended Yonsei University to study commerce but later dropped out.

Following his father's wishes, which included a directive to study in Japan if he could not enter Seoul National University, he pursued higher education abroad. He graduated from Waseda University's Faculty of Commerce in Japan in 1965. Despite admitting to a lack of strong academic interest, often barely passing his courses, he gained crucial insights into corporate management during his time in Japan. He often spoke of feeling lonely during his Japanese studies, leading him to immerse himself in movies and reading.

He furthered his education in the United States, completing an MBA coursework at George Washington University in 1966. These international educational experiences are believed to have profoundly shaped his business acumen and instilled in him a global perspective that would later guide Samsung's expansion.

In recognition of his contributions, Lee Kun-hee received several honorary doctorates throughout his career: an Honorary Doctor of Philosophy from Seoul National University in 2000, an Honorary Doctor of Philosophy from Korea University in 2005, and an Honorary Doctor of Law from Waseda University in 2010. Notably, the Political Science and Economics Academic Research Library at Waseda University's Building No. 3 is named the "Lee Kun-hee Memorial Library" in his honor.

3.1. Joining Samsung and Succession of Leadership

Lee Kun-hee began his career within the Samsung Group in 1966, joining Tongyang Broadcasting Company, which was then an affiliate of the conglomerate. He later gained experience working for Samsung's construction and trading divisions. His ascent within the company was steady, and he was appointed Vice Chairman of the Samsung Group in February 1979.

The path to his eventual leadership was influenced by internal family dynamics. Following the 1966 saccharin smuggling incident involving his older brother, Lee Chang-hee, their father, Lee Byung-chul, temporarily resigned from his chairman position. During this period, his eldest brother, Lee Maeng-hee, briefly assumed leadership. However, upon Lee Byung-chul's return to management, he designated Lee Kun-hee as his successor, reportedly due to a belief that Lee Maeng-hee had reported him to then-President Park Chung-hee.

Lee Kun-hee officially took over the chairmanship of the Samsung Group on December 24, 1987, just two weeks after the death of his father, Lee Byung-chul. This marked the beginning of his influential leadership era.

3.2. The "New Management" Initiative

A pivotal moment in Lee Kun-hee's leadership was the declaration of his "New Management" initiative in 1993. Believing that Samsung was overly focused on producing large quantities of low-quality goods and was ill-prepared to compete on quality in the global market, Lee famously stated, "Change everything except your wife and kids."

This radical call for change was made during a gathering of Samsung executives in Frankfurt, Germany, in 1993, now known as the "Frankfurt Declaration." Lee urged his team to prioritize quality over sheer volume, even if it meant a temporary decrease in sales. To underscore his commitment to this new philosophy, he dramatically ordered the recall and public burning of 150,000 low-quality Anycall mobile phones and other defective products, regardless of whether they were still on the production line or had already been sold. This symbolic act was a powerful demonstration of his resolve to instill a culture of innovation and quality improvement within Samsung, aiming to compete directly with global rivals like Sony Corporation.

3.3. Transformation into a Global Conglomerate

Under Lee Kun-hee's leadership, Samsung underwent a profound transformation, evolving from a largely domestic South Korean entity into a world-leading global conglomerate. His strategic decisions and relentless pursuit of excellence propelled the company to unprecedented heights, particularly in the electronics, semiconductor, and smartphone industries.

The group's overall revenue experienced exponential growth, soaring from 29.00 T KRW in 1993 to 380.00 T KRW by 2013. Samsung's market presence expanded dramatically, with the number of its products holding the top global market share increasing from just one (DRAM) to 20 different product categories. In 2006, Samsung surpassed Sony to become the largest manufacturer of televisions worldwide. By the time of his death, Samsung had solidified its position as the world's largest manufacturer of smartphones, memory chips, and appliances. By 2012, Samsung's revenue alone accounted for approximately 20% of South Korea's GDP, highlighting its immense economic impact.

3.4. Return to Chairman Role and Subsequent Incapacitation

Lee Kun-hee resigned from his chairmanship on April 21, 2008, following the widespread public outcry and legal investigations stemming from the Samsung slush fund scandal. He publicly apologized for the troubles caused to the nation and stated his full acceptance of moral and legal responsibility.

However, he returned to the helm of Samsung Electronics as its chairman on March 24, 2010. He continued in this leadership role until May 10, 2014, when he suffered a severe heart attack at his home in Hannam-dong, Seoul. He was immediately hospitalized, and although his heart and breathing were revived through emergency CPR and subsequent medical procedures, he lapsed into a coma. Lee remained in this unconscious state, receiving continuous medical care at Samsung Medical Center in Seoul, until his death. During this prolonged period of incapacitation, his only son, Lee Jae-yong, effectively assumed the leadership of the Samsung Group, guiding its operations and strategic direction.

4.1. Key Principles and Statements

Lee was renowned for his emphasis on **crisis management**. He frequently articulated a sense of impending danger, even during periods of apparent success. Upon his return to management in March 2010, he famously stated that the future of Samsung Electronics was unpredictable and that most of its flagship products could disappear within a decade, necessitating a continuous drive for new beginnings.

His most iconic declaration, "Change everything except your wife and kids", made during the 1993 "New Management" initiative, underscored his belief in the necessity of radical transformation to ensure Samsung's survival and growth. This was not merely a slogan but a directive for a fundamental shift in corporate culture and operational priorities, moving from quantity to quality.

Another key principle was his focus on **talent management**, encapsulated by his statement on June 5, 2003: "One genius feeds 100,000 people." This highlighted his conviction that a single exceptionally talented individual could drive immense value and progress for a large organization.

Lee often employed the "**Megi theory**" (also known as the Catfish theory) to illustrate his views on competition. This theory suggests that introducing a natural predator, like a catfish, into a tank of fish, such as loaches, forces the prey to swim more actively to survive, thereby making them healthier and more resilient. This concept, derived from the "herring story" by British historian Arnold J. Toynbee, was used to emphasize that external competition and threats are essential for maintaining corporate vitality and fostering continuous improvement.

In 2007, Lee articulated the "**Sandwich theory**," expressing concern that South Korea was "sandwiched" between the rapidly advancing economy of China and the technologically superior Japan. This statement reflected his strategic anxiety about Korea's competitive position in the global market and served as a call for greater innovation and differentiation.

He also demonstrated foresight regarding technological trends, famously stating in 1995 that "a time will surely come when every person has one wireless device." To emphasize the importance of mobile phone quality, he ordered the burning of 150,000 Anycall phones that year, a decisive action that underscored his commitment to quality and helped propel Samsung Electronics to its leading position in the global smartphone market.

Lee Kun-hee's candidness extended to his views on South Korean society. During the Kim Young-sam administration, he controversially remarked that "South Korea's politics are fourth-rate, its bureaucracy and administrative organizations are third-rate, and its corporations are second-rate." While he later clarified that he was quoting Deng Xiaoping, the original quote from Deng placed politics as first-rate and corporations as fourth-rate, leading to further public debate about Lee's assessment of the nation's leadership and economic structure.

5.1. Marriage and Children

Lee Kun-hee married Hong Ra-hee in 1967. Hong Ra-hee comes from a prominent family, being the daughter of Hong Jin-ki, who served as a former chairman of JoongAng Ilbo and Tongyang Broadcasting Company, and also held ministerial positions as the 9th Minister of Justice and the 19th Minister of Home Affairs. Hong Ra-hee is also known for her deep devotion to Won Buddhism and has made substantial philanthropic contributions, including a 12.00 B KRW donation to the Won Dharma Center in New York, a propagation center for Won Buddhism.

Together, Lee Kun-hee and Hong Ra-hee had four children:

• Lee Jae-yong** (born 1968): Their only son and eldest child, who became the de facto leader of the Samsung Group after his father's incapacitation.
• Lee Boo-jin** (born 1970): Their eldest daughter, who serves as the president and CEO of Hotel Shilla, a luxury hotel chain, and also as president of Everland Resort, which is widely regarded as the de facto holding company for the Samsung conglomerate.
• Lee Seo-hyun** (born 1973): Their second daughter, who previously served as president of Samsung Everland's fashion division and is married to businessman Kim Jae-yeol.
• Lee Yoon-hyung** (1979-2005): Their youngest daughter, who tragically died by suicide.

5.2. Family Relationships and Inheritance Matters

The Lee family's influence extended beyond Samsung, as many of Lee Kun-hee's siblings and their children also held executive positions in other major Korean business groups, reflecting the widespread reach of the family's business interests across the nation.

Despite these extensive family ties, Lee Kun-hee was involved in a highly publicized inheritance dispute. In February 2012, his older brother, Lee Maeng-hee, and older sister, Lee Sook-hee, initiated legal action against him. They sought shares of Samsung companies totaling 850.00 M USD (equivalent to 913.56 B KRW), claiming that their father, Lee Byung-chul, had willed these shares to them. Court hearings for this case commenced in May 2012. However, on February 6, 2014, South Korean courts dismissed the case, ruling in favor of Lee Kun-hee.

Lee Kun-hee often acknowledged two primary mentors in his life: his father, Lee Byung-chul, and his father-in-law, Hong Jin-ki. He credited his father with teaching him practical, on-the-ground management skills through direct experience, emphasizing that "management is not theory but practice and intuition." His father-in-law, on the other hand, provided detailed, question-and-answer-based explanations on how various fields such as politics, economics, law, and administration interact and how to leverage such knowledge in business. Lee stated that through these two mentors, he learned both the "literary" and "martial" aspects of management.

6.1. Bribery and Tax Evasion Convictions

In 1995, prosecutors indicted Lee Kun-hee on charges of providing 25.00 B KRW in bribes to former President Roh Tae-woo on nine separate occasions. During Roh Tae-woo's presidency, Samsung Group reportedly gained significant advantages, expanding into various lucrative sectors such as next-generation fighter jet projects, commercial vehicle ventures, large construction projects, and petrochemical industries.

On August 26, 1996, the Seoul District Court found Lee guilty of bribery, sentencing him to two years in prison, suspended for three years. He was subsequently granted a presidential pardon by then-President Kim Young-sam.

On July 16, 2008, the Seoul Central District Court convicted Lee of financial wrongdoing and tax evasion. He received a three-year prison sentence, suspended for five years, and was fined 110.00 B KRW (approximately 98.00 M USD). Prosecutors had initially sought a more severe penalty of seven years in prison and a fine of 350.00 B KRW (approximately 312.00 M USD).

On December 29, 2009, President Lee Myung-bak issued a special pardon for Lee Kun-hee, ostensibly to allow him to maintain his position on the International Olympic Committee. However, during Lee Myung-bak's later corruption trial, it was revealed that this pardon was part of a broader exchange for bribes, exposing further instances of political corruption involving the former president and Lee Kun-hee.

6.2. Samsung Slush Fund Scandal

On January 14, 2008, South Korean police raided Lee Kun-hee's home and office as part of an ongoing investigation into allegations that Samsung operated a secret slush fund. This fund was purportedly used to bribe influential prosecutors, judges, and political figures in South Korea.

Lee initially denied the accusations on April 4, 2008. However, following a second round of questioning by South Korean prosecutors on April 11, he publicly accepted responsibility, stating, "I am responsible for everything. I will assume full moral and legal responsibility." On April 21, 2008, he announced his resignation from all his positions at Samsung, stating, "We, including myself, have caused troubles to the nation with the special probe; I deeply apologize for that, and I'll take full responsibility for everything, both legally and morally."

6.3. Allegations of Illegal Management Succession

Controversies surrounding the process of ensuring Lee Jae-yong's succession to leadership were a recurring theme, with accusations of tax evasion and other potentially illegal corporate practices designed to consolidate family control.

The 2010 book Think Samsung, authored by Kim Yong-chul, a former Samsung legal counsel, made significant allegations of corruption against Lee Kun-hee. The book claimed that he embezzled up to 10.00 T KRW (approximately 8.90 B USD) from Samsung subsidiaries, manipulated evidence, and bribed government officials to facilitate his son's smooth and legitimate succession. Furthermore, it was alleged that Lee Kun-hee engaged in practices that allowed him to avoid gift taxes while transferring Samsung Group shares, which involved the alleged embezzlement of funds from the National Pension Service.

6.4. Other Controversies

Lee Kun-hee's public image was also affected by several other controversies:

• Allegations of Prostitution**: In July 2016, "Newstapa," an independent Korean news website, released hidden camera videos that allegedly showed Lee Kun-hee engaging in illegal prostitution at his home between 2011 and 2013. The videos, reportedly filmed by the women involved, depicted multiple women present at each session, receiving 5.00 M KRW per visit, with a 500.00 K KRW deduction if they exceeded a certain weight. This incident became a major scandal in South Korea.
• Mistreatment of Suppliers ("Gapjil")**: During his chairmanship, there were accusations that employees of Samsung C&T Corporation, under Lee's direction, engaged in "gapjil" - a term referring to abusive behavior by those in power. This allegedly included intervening in the personnel matters of partner companies, subjecting them to verbal abuse and threats, and frequently demanding personal errands. Recordings reportedly documented these practices over an eight-year period.
• Public Eye Award**: In 2012, Lee Kun-hee and Samsung were named among the top three "worst global corporations" in the "Public Eye Award" voting. This award, organized by Swiss civil society organizations such as Berne Declaration and Greenpeace Switzerland, highlights companies with questionable ethical or environmental practices.
• Concert Interruption**: In 2004, Lee reportedly ordered the interruption of a rock band's performance at Phoenix Pyeongchang in Gangwon Province, citing that the music was "too loud." This incident drew criticism for perceived arrogance and abuse of power.

7.1. Health Issues and Prolonged Illness

Lee had a history of health issues, including treatment for lung cancer in the late 1990s. He underwent further cancer testing in 2005 at the MD Anderson Cancer Center in Houston, Texas, with no subsequent concerns publicly announced.

His health took a critical turn on May 10, 2014, when he suffered a heart attack at his home in Hannam-dong, Seoul. He was immediately rushed to the hospital, where his heart stopped. Emergency CPR was performed, successfully restoring his breathing and heartbeat. He then underwent a stent insertion procedure and received therapeutic hypothermia treatment. Despite these efforts, he remained unconscious and in a coma.

He was transferred to a special room at Samsung Medical Center in Seoul, where he received continuous care. Although he remained unconscious, reports indicated that he showed reactions to touch and sound. His medical team implemented stimulating therapies, such as playing movies and music in his room, and occasionally took him for walks in a wheelchair. There were discussions about potentially transferring him to the United States for further treatment via an air ambulance, but he remained hospitalized in Seoul. He remained in this prolonged state of incapacitation for approximately six years and five months.

7.2. Death and Funeral Arrangements

Lee Kun-hee died on October 25, 2020, at Samsung Medical Center in Seoul, at the age of 78. His death marked the end of a long and challenging period of illness. In accordance with his family's wishes, his funeral was conducted as a private family affair.

8.1. Business Achievements and Positive Contributions

Lee Kun-hee is widely celebrated for his pivotal role in transforming Samsung into a global powerhouse. He is credited with steering the conglomerate from a manufacturer of low-quality goods to a world leader in diverse sectors, including semiconductors, smartphones, and consumer electronics. Under his leadership, Samsung became the world's largest manufacturer of smartphones, memory chips, and appliances. The company's market value reached 300.00 B USD at the time of his death.

His strategic vision, encapsulated by the "New Management" initiative and its emphasis on quality and innovation, was instrumental in Samsung's rapid global expansion and its ability to compete successfully with established international brands. He consistently ranked as the richest person in South Korea since 2007, with an estimated net worth of 20.70 B USD, reflecting the immense wealth generated under his stewardship. His contributions significantly bolstered South Korea's economy and technological advancement, positioning the nation as a leader in global innovation.

8.2. Critical Assessments and Societal Impact

Despite his monumental business successes, Lee Kun-hee's leadership drew considerable criticism, particularly concerning corporate governance, labor practices, and ethical conduct. His convictions for bribery and tax evasion, coupled with subsequent presidential pardons, raised serious questions about the rule of law and the undue influence of powerful conglomerates in South Korea. The revelation that one of his pardons was linked to political bribes further intensified public scrutiny.

Allegations of illegal management succession, including claims of embezzlement and bribery to secure his son's control over the conglomerate, highlighted persistent concerns about dynastic control, transparency, and fairness within Samsung. Controversies such as the alleged prostitution videos and accusations of "gapjil" (abusive behavior towards suppliers) significantly tarnished his public image and fueled demands for greater corporate accountability. Furthermore, Samsung's stance on labor unions and its labor practices often faced criticism, leading to protests and debates about workers' rights within the conglomerate. His criminal record notably included violations of labor union laws and personal information protection laws.

8.3. Art Collection and Estate Handling

Lee Kun-hee was a passionate art collector, amassing an extensive collection of over 23,000 works, valued at billions of dollars. This collection included a wide range of masterpieces, reflecting his discerning taste and significant financial resources.

Following his death, his heirs faced an unprecedented inheritance tax bill, estimated at approximately 12.00 T KRW (10.78 B USD). This staggering amount resulted from South Korea's high inheritance tax rate, which stands at 50% for estates exceeding 3.00 B USD, making it one of the highest among OECD countries. In the spring of 2021, Lee's heirs announced their intention to disperse the majority of his vast art collection to public institutions across South Korea. Subsequently, Hwang Hee, the country's Minister of Culture, Sports, and Tourism, announced plans to establish a new museum specifically dedicated to showcasing the Lee collection, ensuring its public accessibility and cultural legacy.