Samsung Chairman Lee Kun-hee Dead at 78

Lee Kun-hee, who transformed Samsung Electronics Co. from a copycat South Korean appliance maker into the world’s biggest producer of smartphones, televisions and memory chips, has died. He was 78.

Lee passed away on Sunday with his family by his side, the company said in a statement, without mentioning the cause of death. His family will hold a private funeral. He had been hospitalized since a heart attack in 2014 and was treated for lung cancer in the late 1990s.

Lee, who told employees to “change everything except your wife and children” during his drive to foster innovation and challenge rivals such as Sony Corp., was South Korea’s richest person. He had an estimated net worth of $20.7 billion, according to the Bloomberg Billionaires Index. Samsung, the biggest of South Korea’s family-run industrial groups, known as chaebol, has been led by his only son since the heart attack.

“Chairman Lee was a true visionary who transformed Samsung into the world-leading innovator and industrial powerhouse from a local business,” the company said. “His legacy will be everlasting.”

His son Jay Y. Lee has been the conglomerate’s de facto leader since his father’s hospitalization in 2014, but it isn’t clear whether he will take over his father’s role as had long been anticipated. The younger Lee is currently grappling with two simultaneous legal disputes with South Korean prosecutors over allegations of bribery and corruption related to succession.

Lee, who has denied any wrongdoing, was in fact supposed to attend a hearing for one of those court cases Monday, but instead is expected to remain at the hospital with his family. Samsung hasn’t said who will step into the elder Lee’s role as chairman.

Samsung, the maker of the Galaxy line of smartphones, has been riding a Covid-era boom in online activity despite the legal clashes. The company also supplies semiconductors for Google’s data centers and Apple Inc.’s iPhone, and is the world’s most advanced maker of displays for TVs, computers and mobile devices.

Lee Kun-hee’s heirs now face an estate tax of roughly $10 billion, and paying it may complicate the family’s control of the Samsung conglomerate. His beneficiaries would likely have to sell some assets to cover the tax, diluting their stake in Samsung. South Korea’s levy of 50% on estates of more than 3 billion won ($2.6 million) is the second-highest among countries in the Organization for Economic Cooperation and Development, after Japan.

The Samsung empire includes 62 companies. Although the late Lee owned large chunks of some of the businesses — including 4.2% of Samsung Electronics — they’re not big enough to afford control of the conglomerate. The family depends on informal ties to executives who run related companies, and a lot of that soft power may dissipate with Lee’s death.

It was Lee Kun-Hee who built the company into the electronics powerhouse of today, becoming synonymous with the rise of South Korea on a global economic stage.

In 1967, Lee Kun-hee married Hong Ra-hee. In addition to his son Jay Y. he has two daughters, Boo-jin and Lee Seo-hyun. Another daughter, Lee Yoon-hyung, died in 2005 at age 26.

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