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Samsung Electronics Vice Chairman Lee Jae-yong is accompanied by his siblings Lee Seo-hyun, director of the Samsung Welfare Foundation, Lee Boojin, president of Hotel Shilla, and his mother Hong Ra-hee during the funeral of late Samsung Electronics Chairman Lee Kun-hee in Suwon, Gyeonggi Province, on Oct. 28. (Yonhap News)

With funeral procedures for late Samsung Electronics Chairman Lee Kun-hee concluded on Oct. 28, the “moment” has now arrived for his son, Vice Chairman Lee Jae-yong. The question of how to progress beyond the past six years -- which have seen Lee Jae-yong as the Samsung group’s de facto leader since his father was sidelined by a heart attack in May 2014 -- is seen by observers as the single most pressing issue facing him.

As it happens, both father and son experienced dramatic shifts in their fortunes at the age of 45. When Lee Kun-hee succeeded his own father, inaugural Chairman Lee Byung-chull, to become the conglomerate’s leader in 1987 at age 45, he spent some time aggressively shunning a foreground role. He had taken over the position of chairman due to his predecessor’s sudden death, so it was vital to secure his authority and to ensure management stability. In particular, he faced the inevitable prospect of internal strife with his father’s “retainers” such as former Chief Secretary So Byung-hae, who had long played a second-in-command role on behalf of the inaugural chairman.

Lee Kun-hee’s “new management declaration” in Frankfurt six years later in 1993 amounted to an official announcement that he had finished addressing personnel issues and was prepared to “stand alone.” He used the occasion as an opportunity to prepare for Samsung’s “gestation period” as a global business, touring Europe and Japan over a 68-day period with around 200 key figures from the Samsung Group’s management.

The last six years under Lee Jae-yong have been quite different. After Lee Kun-hee was abruptly sidelined by a heart attack, his son assumed a central role in major decisions as de facto group leader at the age of 45. The Fair Trade Commission (FTC) recognized his legal status as de facto group leader in May 2018. Another difference from his father’s era was that there was no need for any internal strife, as former Vice Chairman Lee Hak-soo -- a living symbol of the Lee Kun-hee era – and his inner circle had been cleared out around 10 years earlier.

Other developments from the past six years include the 2014 sale of non-mainstay affiliates in areas such as petrochemicals and defense to Hanwha and the Lotte Group, as well as the 2016 acquisition of automotive electronics company Harman for US$8 billion -- the largest amount in South Korean history for a merger/acquisition. While Lee Jae-yong might not have officially taken over the title of “chairman,” his first six years have been characterized by much a more aggressive and assertive style than his father’s early years.

But the real difference in Lee Jae-yong’s six years lies elsewhere. He is now facing his fourth year as a defendant in trials involving government influence peddling and accounting fraud at Samsung Biologics; for roughly a year beginning in February 2017, he was imprisoned. He had been hoisted to his position through illegal and dubious succession tactics. It remains a painful fact for him that despite being the de facto director of the group’s management, he has yet to establish firm roots on the global stage with an image of “leadership” rather than “pursuit.” This stands in contrast with the developments of 1992, when his father the “hermit leader” spearheaded the world’s first 64MB DRAM device, firing the signal flare for the “semiconductor legend” to come.

Last May, Lee Jae-yong held a press conference to apologize to the South Korean public at the recommendation of a legal compliance oversight committee established at the request of the Seoul High Court following a Supreme Court remand and reversal decision with a recommendation to convict. Lee pledged to abolish the group’s “no union” policy, scrap his plans for a fourth-generation succession, increase communication with civil society, and comply with the law in management practices. The past six years under Lee have been filled with cases of being bound to past practices without responding to the expectations of a very different era.

On Oct. 26, Samsung’s legal compliance oversight committee stressed that “Samsung’s even higher rise to become a global business in a class of its own was the wish of Chairman Lee Kun-hee,” adding that the “establishment of a desirable culture of legal compliance at Samsung is a necessary part of that, and this was the task that Chairman Lee Kun-hee left behind.” This gives some indication of what sort of things will need to come about during Lee Jae-yong’s new “moment” -- a different look from the past six years.

By Koo Bon-kwon, senior staff writer

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