hankyoreh

By Lee Chun-jae, staff reporter

In the legal battle over the Samsung inheritance, Samsung Electronics chairman Lee Kun-hee rejected an overture for reconciliation from Lee Maeng-hee, his older brother and former chairman of Cheil Fertilizer.

On Jan. 7, in a hearing for the appeal being tried by the 14th civil division of the Seoul High Court (Judge Yun Jun presiding), Yun Jae-yun, the lawyer representing Lee Kun-hee, said, “After carefully reviewing the proposal, we have decided not to accept the proposal for reconciliation.”

“We decided that this is an issue that transcends familial and fraternal love and concerns the management stability of Samsung, which is a global corporation,” Yun said. “Reconciliation would go against the last wishes of Lee Kun-hee’s father, Lee Byung-chul, and it would be a violation of principle.”

During a hearing on Dec. 24, 2013, lawyers for Lee Maeng-hee had indicated that their client hoped to reconcile with his brother in the interest of family harmony.

Lee Kun-hee’s rejection of the request for reconciliation appears to be based on the belief that he will win in the appellate court just as he won in the lower court. Lee Kun-hee believes that the appellate court will uphold the lower court’s position that his older brother waited too long to claim his part of the inheritance.

“There’s a ten-year window to make a claim for restored inheritance, and this period is calculated from the day that the inheritance rights were infringed, regardless of whether the true inheritor was aware of this or not,” the lower court ruled. It decided that the date of infringement of inheritance rights was the general stockholders’ meeting of Samsung Life Insurance in May 1988 when Lee Kun-hee exercised voting rights on 420,000 shares of assumed-name stocks. As a result, the court ruled, the ten-year claims period has already elapsed.

Lee Kun-hee believes that his older brother failed to provide the appellate court with evidence about the claims period that was decisive enough to overturn the decision of the lower court, sources say.

Another contributing factor appears to be Lee Kun-hee’s belief that this time the courts will officially recognize the legitimacy of the management rights to the Samsung Group, which he inherited from his father. “This lawsuit is a challenge to the managing rights of the Samsung Group,” Lee Kun-hee’s attorneys said. As they see it, the lawsuit was filed by eldest grandchild Lee Jay-hyun, chairman of the CJ Group, in an attempt to undermine the management rights to the group shortly before the transition to management by the third generation, including Lee Jae-yong, vice chairman of Samsung Electronics. “This lawsuit is not a question of money, but of justice. It is a question of whether or not we will abide by the last wishes of our father,” said representatives for Lee Kun-hee. “There appears to be some ulterior motivations in suddenly proposing reconciliation when the appellate trial is almost over.”

Lee’s attorneys also said that he had considered the negative effects of reconciliation, including doubts raised by the Wall Street Journal and other foreign news outlets about how the lawsuit would affect the stability of management at Samsung. “After reading reports in the foreign media, we decided that not reconciling would be more helpful for the management of the group,” Lee’s representatives said.

However, the Korean public does not look kindly on a younger brother rejecting a proposal for reconciliation made by his older brother in the interest of bringing the family together, and it is expected that negative public opinion will be problematic for Lee Kun-hee.

Attorneys Lee Maeng-hee responded by calling this an “unexpected decision.” “To be honest, I was a little surprised,” said Cha Dong-eon, lawyer for the elder Lee. “If they are concerned about issues for management, it would seem like reconciling would be more in their interest.” After holding the final hearing on Jan. 14, the court is expected to render a decision in late January or early February.

Please direct questions or comments to [english@hani.co.kr]