An era for Samsung is over. On October 25, Lee Jianxi, chairman of Samsung, who had been in bed for six years due to heart disease, died at the age of 78. As the second generation leader of Samsung, he has been at the helm of the "giant ship", which occupies one fifth of South Korea's economic lifeline, for more than 30 years. During this period, Samsung grew from a local enterprise to a world-renowned business empire, and he was accompanied by honor and controversy.
With the death of Li Jianxi, Samsung is about to usher in a third-generation successor: Li zaireng, the eldest son of Li Jianxi and vice chairman of Samsung Electronics. Where will he lead Samsung?
Key figures in Samsung's rise
"Chairman Li is a real visionary who transformed Samsung from a local company into a world leading innovator and industrial power," Samsung said in a statement. "His legacy will be eternal."
As the official statement said, Li Jianxi is a key figure in Samsung's rise.
Samsung was formally established in 1938 by Li Bingzhe, the father of Li Jianxi. Its main business in the early stage was to export dried fish, vegetables and fruits from South Korea to China. Later, it gradually expanded to sugar, pharmaceutical, textile and other manufacturing industries, and established Samsung Electronics in 1969.
Samsung in Lee's era is not weak, but it is only stronger than South Korea, not the world.
Li Jianxi and his father Li Bingzhe
Li Jianxi is Li Bingzhe's third son. He also has two brothers, Li Mengxi and Li Changxi. According to the inheritance mode of Samsung family business, the first successor is obviously not Li Jianxi.
Li Bingzhe initially wanted his eldest son, Li Mengxi, to inherit his family business, but he didn't want this "legitimate eldest son" not to strive for success. After taking office for half a year, Samsung's operation fell into chaos. After Li Bingzhe dismissed him, Li Mengxi even directly accused his father of tax evasion, hoping to regain power. However, he was expelled from his family.
At this time, Li Changxi, the second son, came forward to put his father Li Bingzhe in prison. Li Jianxi, who had not been taken seriously before, finally got the chance. After the death of Li Bingzhe in 1987, Li Jianxi became the new president of Samsung.
Li Jianxi graduated from Waseda University, Japan's first private university, in 1965, economics department, in 1966 at George Washington University completed a master's degree in business, very international vision. It is also the basis for his ability to make Samsung a global business.
With the rapid expansion of Samsung's multiple businesses, there are inevitably various drawbacks: the management is satisfied with the status quo, and the enterprise's operation efficiency is low. After taking office, Li Jianxi began to carry out a comprehensive reform of Samsung.
In 1988, the second year after his accession to the throne, he announced the start of his second venture at the celebration of Samsung's 50th anniversary, saying that he would lead Samsung to become a world-class enterprise in the 21st century.
In 1993, Li Jianxi carried out a reform action called "new operation": he made it clear that Samsung's goal was to be a global super enterprise; he advocated the establishment of a sense of crisis, and required all senior managers to start changing from themselves; he implemented a new working time system of going to work at 7:00 a.m. and leaving work at 4:00 p.m. every day, and even put forward the reform slogan of "change everything except wife and children".
At present, Samsung Group has many subordinate enterprises: Samsung Electronics, Samsung products, Samsung heavy industry, Samsung Life Insurance, etc., and its business involves electronics, finance, machinery, chemistry and other fields. Among them, three subsidiaries have been selected into fortune 500.
According to the data, Samsung's overall turnover is equivalent to one fifth of South Korea's GDP, playing an important role in South Korea's economy. South Koreans even list death, taxes and Samsung as three things they can't avoid.
With Samsung, Lee has become South Korea's richest man. According to Forbes' 2020 South Korea rich list, Lee's wealth is as high as $17.3 billion.
Query and dispute
There is no doubt that Li Jianxi is a brilliant achiever of the Samsung empire. However, due to the subtle relationship between the chaebol enterprises and the government in South Korea, his life is also accompanied by constant disputes.
In 1996, Li Jianxi was accused of bribing the former president of South Korea in 1989 and 1992, and was sentenced to two years' probation. Before the 1997 presidential election, he sponsored the presidential candidate for $10 million in political contributions, and his sentence was exempted that year, which aroused public doubts.
In 2007, it was revealed that there were a number of illegal activities in Samsung, which was under the helm of Li Jianxi; in 2008, Li Jianxi was charged with several charges of tax evasion, breach of trust and dereliction of duty, so he had to resign as chairman of Samsung and was sentenced to three years' imprisonment in 2009.
But miraculously, he was pardoned by the president of South Korea at the end of 2009, because he was asked to use his capacity as a member of the International Olympic Committee to help South Korea bid for the 2018 Winter Olympics. In 2010, Li Jianxi, who resigned for two years, returned to Samsung's management.
The US Newsweek once described him as the "King behind the scenes", saying that his position in the Korean economy can be compared with the position of the president in politics and the "economic president" of South Korea.
In fact, chaebol enterprises like Samsung are a force that can not be ignored in Korean society. The data shows that the annual gross output value of the top ten chaebols in South Korea can account for more than 70% of the national GDP. Many South Korean people question that these chaebol enterprises and managers use their own economic strength to influence the government's decision-making.
Li Jianxi's controversy goes beyond that.
In 2016, South Korean media reported that they had received a video of Li Jianxi involved in whoring provided by an anonymous informant. The video recorded a total of five conversations between 2011 and 2013 when he was suspected of calling prostitutes in his home. The report caused a stir at the time, but Samsung did not respond.
In 2014, Li Jianxi was sent to the hospital for a heart attack and has been in the hospital for treatment since then. Later, he died on October 25 because of the deterioration of his illness. Li Jianxi also ended his legendary and controversial life.
The next direction of Empire
Li Jianxi has a son and three daughters, the eldest son Li zaireng, the second daughter Li Fuzhen, the third daughter Li Xuxian and the youngest daughter Li Yinxin.
As the only son and eldest son, Li Zairong undoubtedly became the key training object of Li Jianxi. Since Li Jianxi had a heart attack in 2014, Li has become the actual controller of Samsung.
However, in order to avoid the power struggle between himself and his brothers in his early years, Li Jianxi has not publicly stated who is the successor of Samsung. For several children, they are also entrusted with heavy responsibilities.
Among them, Li zaireng, the eldest son, is the vice chairman of Samsung Electronics, which controls the core business of Samsung; Li Fuzhen, the second daughter, is the president of Xinluo Hotel, in charge of the hotel business; the third daughter, Li Xuxian, is in charge of the clothing business; Li Jianxi's favorite is his younger daughter, Li Yinxin, who died unexpectedly in 2005.
However, Li Zai Rong's road of succession was not smooth. Like his father, Li Jianxi, he was involved in political scandals.
In 2016, park Geun hye, then president of South Korea, was exposed as an incident of interference in politics by his cronies. Li Zairong was also involved, accused of taking bribes to Cui Shun, park Geun hye's best friend and the protagonist of political interference, to seek benefits.
Li Zairong arrested
In 2017, Li was sentenced to five years' imprisonment in the first instance of Rong's bribery case; in 2018, Li was sentenced to two years and six months' imprisonment, suspended for four years, and released in court after his appeal. At that time, Li Zai Rong had spent nearly a year in prison.
However, Li Zairong is not yet completely out of his troubles. This year, he was charged with not detaining him on suspicion of illegally inheriting and managing his business rights. The third-generation successor to Samsung is still at risk of being jailed.
In May, Li apologized to his people publicly and said he would not inherit the company's business rights to his children. This is seen as Samsung's family succession system, which may end in the third generation of successors Li Yurong, or to some extent reduce national concerns about the intervention of financial and valve enterprises in politics.
However, one variable is that South Korea's inheritance tax ranks first in the world, with a minimum tax rate of 18%, reaching more than $25 million and a maximum tax rate of 50%. According to Li's $17.3 billion fortune, his heirs may face an estate tax of $7.6 billion. Previously, foreign media speculated that paying a huge inheritance tax might complicate the Li family's control over Samsung.
With the death of Li Jianxi, an era came to an end. And where Samsung is heading, his successor, Li zaireng, may not be able to fully steer the course.