Samsung squabble speaks to history of discord

Posted on : 2012-04-25 15:47 KST Modified on : 2012-04-25 15:47 KST
Latest conflict can be traced back through a succession of disagreements

By Kim Jin-cheol, staff writer

Lawsuits between siblings in a conglomerate family over their father’s legacy, behind-the-scenes scrapping, crude remarks---the melodrama currently unfolding in the Samsung Lee family is a spectacle out of a television miniseries. But the fortune itself is insufficient to explain it. This is why many observers are calling the situation just the latest in a string of internal conflicts that have been erupting since before the death of the Samsung Group’s founder and chairman Lee Byung-chull.

Perhaps the most central factor is the conflict over the family’s line of descent. Samsung Electronics chairman Lee Kun-hee, 70, described his 81-year-old brother, former Cheil Fertilizer chairman Lee Maeng-hee, on Tuesday as “someone who was evicted from our household.”

His remarks are closely connected to the so-called saccharin smuggling incident of 1966. Lee Byung-chull stepped down from active management over that scandal, and Lee Maeng-hee became chairman in his stead.

But the father was unimpressed with his son’s management capabilities. “I gave part of the group‘s management to my oldest, Maeng-hee. And before even six months had gone by, the entire group was in chaos,” he wrote in his memoirs, “The Autobiography of Hoam.”

The year 1969 saw a new scandal erupt over a letter to the Blue House from second son Lee Chang-hee, the onetime chairman of Saehan Media. In it, Lee wrote that his father had been involved in the saccharin smuggling incident. Lee Byung-chull concluded that Maeng-hee was behind the letter. This was a factor behind Lee Kun-hee’s repudiation of Maeng-hee‘s “legimitacy,” describing his older brother as “a guy who lodged an accusation with President Park Chung-hee to have his own father put in jail.”

Lee Maeng-hee saw it differently. In his 1993 book of essays “Buried Stories,” he wrote, “There was something of a divide between my father and me, but I always believed I would be given the reins.”

He also once recalled his father as saying, while handing over group authority to Lee Kun-hee, that it should be “passed on to [Lee Maeng-hee’s son] Jay-hyun next time.”

In “The Autobiography of Hoam,” Lee Byung-chull wrote, “I had initially planned to give the mass communications [the JoongAng Ilbo and Tongyang Broadcasting Company] to Kun-hee, my third son, but since he was working so hard for integrated management, I decided to bequeath management of Samsung to the third son.”

Another conflict erupted in 1993 when Lee Jay-hyun, who is currently chairman of the CJ Group, was separating that group off from the Samsung Group in its original incarnation as Cheil Jedang. CJ has claimed that the spinoff was impeded when then Samsung Fire & Marine Insurance vice president Lee Hak-soo was sent in as Cheil Jedang‘s vice chairman and CEO. In “Buried Stories,” Lee Maeng-hee wrote that “there had been a promise to give Jay-hyun the Samsung affiliates with ’Cheil‘ in their name, but Lee Kun-hee did not keep that promise.”

Lee Maeng-hee’s remarks Monday, when he said that “Kun-hee has done nothing but fan the discord among us siblings and take care of his own desires,” are being read along similar lines.

The rancor between Lee Kun-hee and his sister Sook-hee, 77, originated with a marriage into the LG family. In 1956, Sook-hee married Koo Ja-hak, current chairman of Our Home and the son of the late Koo In-hoi, founder and chairman of Goldstar, which would later become LG. Koo Ja-hak is known to have earned the trust of his father-in-law Lee Byung-chull while working at Samsung. But fissures between them widened as Samsung moved into electronics, which prompted Koo‘s return to Goldstar. Lee Sook-hee previously said that “there was all kinds of jealousy and backbiting after my husband earned [Lee Byung-chull’s trust], and in the process I was prevented from receiving any inheritance.”But Lee Kun-hee contended that his sister was abused by her in-laws for Samsung‘s efforts in the same industry as Goldstar, saying at one point that “this is why she came back to our family pleading.” He also quoted his father as saying, “If Samsung Electronics is so alarmed about you, I can’t give you a single Samsung stock.”

Maeng-hee and Sook-hee are known to have the closest relationship among the Lee siblings. The former was a childhood friend of Koo Ja-hak who traveled abroad with him in 1957 to study in the US, and the two couples are known to have lived together there for three to four years.

In an interview, Lee Sook-hee said, “Samsung was so rotten to my brother [Lee Maeng-hee] that I decided to join him and lend my support.”


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