Lee Kun-hee vows to fight in family feud

Lee Kun-hee Samsung Electronics Chairman

Samsung Electronics Chairman Lee Kun-hee said Tuesday that the nation’s most-powerful industrial conglomerate won’t seek a peace treaty with his relatives over the ongoing family feud over a portion of their father’s fortune.

“There will be no compromise with my relatives and the issue associated with a portion of my father’s fortune had already been settled. I think my relatives are requesting more because Samsung is a much larger company,’’ Lee told a group of reporters upon his arrival at Samsung’s headquarters in downtown Seoul.

This is the first time for the chairman to comment on the family feud since the dispute erupted in February.

“Again, my stance is very clear. I do not mind bringing the case to the country’s highest court,’’ Lee, who has rarely commented on family-related sensitive issues, told reporters at around 6:30 a.m. on his way to work.

Samsung’s chief communications official Rhee In-yong has confirmed the chairman’s remarks in a short briefing to local media.

“The remarks by Chairman Lee mean that he has no plan to drop the lawsuits against his relatives,’’ Rhee told reporters in a separate briefing.

In February, the Samsung chairman’s older brother Lee Maeng-hee filed a lawsuit, seeking about 714 billion won ($635 million) in shares of Samsung affiliates, mainly Samsung Life. The Samsung Chairman’s elder sister Lee Sook-hee filed a separate suit against him, asking for about 196 million won in shares.

The two are still arguing that their younger brother Kun-hee took of their father and the late Samsung founder Lee Byung-chull’s wealth that was hidden under the names of other people and didn’t tell them.

The requests from the two aren’t acceptable to the Samsung chairman. Samsung Life went public in 2010 and of the 200 million outstanding shares, he is the biggest shareholder with around 41.5 million or 20.7 percent of the total. The 8.24 million shares requested by his older brother are about 19.8 percent of Lee Kun-hee’s stake. The 2.23 million shares sought by his elder sister represent about 5 percent.

The Samsung chairman controls an entire group in a series of cross-holding units that include Samsung Life. The demands from Maeng-hee and Sook-hee are enough to threaten Kun-hee’s current controlling power.

Samsung and CJ Group, which is led by Lee Jae-hyun, the son of Lee Maeng-hee, has also become involved after CJ reported that the CJ chief was tailed by an employee of Samsung C&T. Local prosecutors are still investigating for the case.

“It’s nonsense for the two to ask a part of the late Samsung founder’s fortune as CJ terminated ties with Samsung in 1997,’’ said another Samsung executive, asking not to be identified.

CJ Group declined to make any official comments, however, company officials said it won’t strike any agreement with Samsung.
Last year, Samsung and CJ Group both bid for Korea Express, a logistics company that CJ eventually bought.

It’s common for Korea, which still has a Confucian culture, to give business controls to the eldest son. The current Samsung chairman was the eldest son of the late Lee Byung-chull.

During the ongoing feud, the chairman only-son and Samsung Electronics Chief Operating Officer (COO) Lee Jae-yong recently met Sweden’s Wallenberg group in an attempt to get advice from about maintaining Samsung’s family-run business and improving the empire’s corporate governance.

“Today’s remarks by the Samsung chairman were quite organized and well-made as I think Lee believes his father’s fortune was more about the inheritance of Samsung’s management not wealth,’’ said the unnamed Samsung executive.

Aside from the family feud, Lee asked the presidents of its heavy equipment and construction affiliates to expand their overseas businesses.

“Should Samsung scout high-profile personnel to bolster our further presence outside Korea,’’ the chairman said in a luncheon meeting.

“Quality and safety are very important for technologies that relate to energy and power plants. You should be ready to guarantee product quality.’’

Samsung Group has Samsung Electronics as the group’s most critical unit, however, its global presence in power plants and other heavy equipment-related businesses is relatively weak. Samsung Electronics is the world’s top maker of smartphones, televisions, flat-screens and memory chips. <Korea Times/Kim Yoo-chul>

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