Samsung Heir Makes History by Pledging to End Family's Corporate Dynasty

By Victoria Song on at

There are a few things to know about Samsung’s heir apparent Lee Jae-yong and how his family runs the company – he does not make frequent media appearances, apologies are rare, and family succession is a given. But in a press conference today, Lee not only publicly apologised for his role in a bribery scandal involving succession plans, but he also announced that he has decided not to hand the company over to his children.

The apology was Lee’s first public statement in five years; the last was when he publicly apologised for Samsung’s botched handling of Middle East Respiratory Syndrome at Samsung Medical Centre, a hospital in Seoul. Today, he also apologised for the company’s recent union-busting and pledged to guarantee labour rights going forward.

“We failed, at times, to meet society’s expectations. We even disappointed people and caused concern because we did not strictly uphold the law and ethical standards,” Lee said at the press conference, according to Reuters.

The scandal in question dates back to 2017 when Lee was accused and arrested for bribery, embezzlement, and perjury. Lee and a few other Samsung executives were found guilty of bribing former South Korean President Park Geun-hye and her Rasputin-esque confidante Choi Soon-sil in a plot to secure his succession from his father, Lee Kun-hee, who was incapacitated by a heart attack in 2014 and is infamous in his own right.

As a result, Lee was sentenced to five years in prison. He served one year of his sentence, but then was released in 2018 after a successful appeal to lower the original sentence and suspend it for three years. However, that ruling was then overturned last August, meaning he could be facing a harsher sentence and a return to jail. Both Reuters and The Korea Herald report Lee’s apology came at the advice of an internal compliance monitoring committee, which urged him to own up to the company’s wrongdoings.

But the real kicker is the issue of succession. Samsung is what’s known as a chaebol – a type of family-run business conglomerate that is akin to corporate dynasties. Chaebol are prevalent in South Korea’s economy and many big-name brands like Hyundai and LG fall under the arrangement. While they are credited with South Korea’s so-called “economic miracle,” the fact that they concentrate a huge portion of the country’s wealth to a small number of families has led some to question whether chaebol are outdated and ill-suited for the 21st century. At the press conference, Reuters reports that Lee attributed the controversies surrounding him stemming from the issue of succession.

“I will not pass the company’s managerial rights to my children,” Lee said, according to the Korea Herald. “I have thought about it for a long time, but was hesitant about making it public.”

Breaking with tradition has big implications, not just for Samsung Electronics – the Samsung Group’s most prized company – but also the 59 affiliates under the Samsung umbrella and the South Korean economy at large.

Featured image: Getty