Lee Kun-hee, 78, built Sam­sung Elec­tron­ics into a global gi­ant and saw his con­vic­tions par­doned.

The Washington Post - - METRO - BY MIN JOO KIM AND HAR­RI­SON SMITH min­joo.kim@wash­post.com

seoul — Lee Kun-hee, who built Sam­sung Elec­tron­ics into a global tech gi­ant but whose ten­ure was marred by a pair of white-col­lar crime con­vic­tions that were wiped away by pres­i­den­tial par­dons, died Oct. 25. He was 78.

His death was an­nounced by Sam­sung, which did not spec­ify the cause. Mr. Lee had been treated for lung can­cer in the late 1990s and was in­ca­pac­i­tated for years af­ter a 2014 heart at­tack that led his son, Jae-yong, to take over run­ning the com­pany.

“Chair­man Lee was a true vi­sion­ary who trans­formed Sam­sung into the world-lead­ing in­no­va­tor and in­dus­trial pow­er­house from a lo­cal busi­ness,” the com­pany said in a state­ment.

Un­der Mr. Lee’s three decades of lead­er­ship, Sam­sung Elec­tron­ics grew from a small tele­vi­sion maker into the world’s big­gest pro­ducer of smart­phones, elec­tronic dis­plays and mem­ory chips. He was con­victed of bribery and then tax eva­sion but par­doned in both cases.

Mr. Lee was born in Daegu, in Ja­panese-oc­cu­pied Korea, on Jan. 9, 1942. His fa­ther, Lee Byungchul, founded Sam­sung as a small trad­ing com­pany in the south­east­ern city. Mr. Lee in­her­ited the com­pany in 1987 and em­barked on a qual­ity-im­prove­ment drive to rid it of a rep­u­ta­tion for pro­duc­ing cheap copy­cat ap­pli­ances.

Mr. Lee called it a “life-or-death sit­u­a­tion” and ad­vised ex­ec­u­tives: “Change everything ex­cept for your wife and chil­dren.” In its state­ment Sun­day, the com­pany re­mem­bered the moment: “His 1993 dec­la­ra­tion of ‘New Man­age­ment’ was the mo­ti­vat­ing driver of the com­pany’s vi­sion to de­liver the best tech­nol­ogy to help ad­vance global so­ci­ety.”

In 1995, he fa­mously or­dered nearly $50 mil­lion worth of cell­phones and fax ma­chines set on fire, cit­ing low qual­ity. The bon­fire was watched by 2,000 Sam­sung em­ploy­ees who wore head­bands read­ing “Qual­ity first,” ac­cord­ing to news me­dia re­ports at the time.

Sam­sung Elec­tron­ics is the flag­ship of Sam­sung Group, a sprawl­ing pow­er­house with dozens of af­fil­i­ates that stretch into ship­build­ing and life in­sur­ance. The group is the largest and most pow­er­ful of South Korea’s chae­bol, fam­ily-con­trolled con­glom­er­ates that dom­i­nate the econ­omy.

Many chae­bol ty­coons, in­clud­ing Mr. Lee, were con­victed of white-col­lar crimes but then granted par­dons as the Korean gov­ern­ment and the pub­lic sought to pre­vent any eco­nomic fall­out from their ab­sence.

Mr. Lee was con­victed twice, but his jail sen­tences were sus­pended by the courts both times, a com­mon prac­tice that helped ex­ec­u­tives re­turn to work.

In 2008, he stepped down from the lead­er­ship af­ter he was con­victed of man­ag­ing slush funds and evad­ing taxes to pass com­pany shares to his chil­dren. He re­took the helm two years later af­ter a pres­i­den­tial par­don, given so that he could re­sume his work on a lob­by­ing cam­paign that brought the 2018 Win­ter Olympics to Pyeongchan­g. His other par­don was in 1997, af­ter he was con­victed of brib­ing a for­mer pres­i­dent.

Mr. Lee’s busi­ness em­pire was in­volved in a cor­rup­tion scan­dal that led to the im­peach­ment of Pres­i­dent Park Geun-hye, who was re­placed by Pres­i­dent Moon Jae-in in 2017. Moon has promised to end the prac­tice of par­don­ing con­victed cor­po­rate lead­ers.

Mr. Lee’s son, Lee Jae-yong, Sam­sung’s de facto head, was sen­tenced to five years in prison for brib­ing Park and her con­fi­dant to help se­cure his con­trol over Sam­sung. He spent a year be­hind bars be­fore an ap­peals court re­duced his sen­tence and re­leased him.

Mr. Lee was con­sid­ered the rich­est per­son in South Korea, with a net worth that Forbes es­ti­mated at more than $17 bil­lion.

In ad­di­tion to his son, sur­vivors in­clude his wife, Hong Ra-hee; and two daugh­ters, Boo-jin and Seo-hyun. Another daugh­ter, Yoon-hyung, died by sui­cide in 2005.

Lee Kun-hee

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