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Lee Kun-hee, Samsung family patriarch, 1942-2020



Lee Kun-hee, who transformed Samsung from a primarily local South Korean business into one of the world’s biggest technology groups, died on Sunday at the age of 78.

Lee had remained out of the public eye since suffering a heart attack in 2014, with his 52-year-old son Lee Jae-yong officially taking over management of the sprawling South Korean technology group.

But the elder Lee is credited with turning Samsung into a world leader in sectors ranging from technology and construction to shipping and mobile phones.

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

Lee was known simply as “the chairman” among the company’s employees and rarely seen among its staff. But for 26 years, the publicity-shy South Korean held unchallenged authority over the group.

Lee’s vast wealth and connections to South Korean elite led some to deem him the country’s most powerful man, with more enduring influence than presidents. A string of lawsuits provoked concerns about how he wielded this power. He was convicted several times for crimes related to the succession process but was pardoned by a number of the country’s former presidents.

Yet even Lee’s critics tend to respect his achievements at Samsung, which pulled away from Hyundai to become the biggest of South Korea’s chaebol, or industrial groups, by a wide margin. The company is the largest maker of memory chips, smartphones and electronic displays, Samsung C&T built the world’s tallest building in Dubai and Samsung Heavy Industries is the world’s third-largest shipbuilder by sales. Other subsidiaries’ range from theme parks to howitzers.

It is for the transformation of Samsung Electronics, however, that Lee will be most remembered. Samsung was a minor player in the global technology industry when he took the helm in December 1987, succeeding Lee Byung-chull, his father and the group’s founder.

Lee’s university education in Japan and the US focused on economics and business, but he worked to master the science of semiconductors, giving him the confidence to authorise major investments in the field. Within five years, Samsung was the world’s biggest producer of memory chips underpinned by billions of dollars of annual investment, even during downturns.

Despite this success, shoppers around the world continued to view Samsung’s consumer electronics as poorly designed and undesirable. Lee’s aggressive interventions to change this perception have now become legend.

The most famous came in 1995, after the humiliation of finding that Samsung mobile phones he had given as gifts did not work. Two thousand Samsung employees at a phone manufacturing factory south of Seoul were instructed to don headbands marked “quality first” and gather outside. Thousands of phones and other electronic devices — with an estimated total value of $50m — were incinerated on a bonfire and the ashes were pulverised by a bulldozer.

Lee Kun-hee turned Samsung into the global leader in smartphone sales © Bloomberg

Despite Lee’s admonitions to executives to “change everything but your wife and kids”, the results of the quality drive took years to materialise. But from early this century, Samsung began to win substantial global market share in consumer electronics with a more reliable and attractive range of products, backed by a huge increase in marketing expenditure. In 2006, it became the world’s biggest television producer by unit sales, having capitalised on the rise of flatscreen sets faster than rivals such as Sony.

Lee’s transformation of Samsung was also seen as instrumental in South Korea’s economic transformation in the 20th century. “He was the best business leader that had not only developed Samsung into a first-class global player but also placed South Korea among advanced economies,” said the Federation of Korean Industries, a lobby group for big businesses.

Lee’s project was badly disrupted by a scandal that began in 2007, after Samsung’s former general counsel alleged massive bribery and corruption at the company. Lee resigned from Samsung in 2008, before being convicted of tax evasion and breach of trust. But he was cleared of bribery and a presidential pardon opened the door for him to return in March 2010.

The saga added to controversy over Lee’s ability to exert control over all Samsung companies through a complex web of cross-shareholdings, despite the fact that his only formal position was chairman of Samsung Electronics. Even this was effectively an honorary title, never having been approved by shareholders. But current and former executives insist that this unorthodox governance system helped Samsung’s rapid rise.

On occasion, Lee would travel to the company’s headquarters early in the morning to deliver exhortations to executives. Normally, he preferred to work from his mansion in the upmarket district of Hannam, receiving visitors there or in a nearby building. One former executive remembers colleagues abstaining from drinking water in the morning before a marathon meeting with Lee, knowing that comfort breaks were out of the question.

Once Lee made a decision, Samsung moved with impressive speed. “It is an organisation full of people who are ready to rush towards the front line and sacrifice themselves at an order of a commanding officer,” a Sony executive admiringly told a Korean writer, as Samsung roared past the once-dominant Japanese company. “Chairman Kun-hee Lee is the commander-in-chief.”

That fleet-footedness was seen most clearly as Samsung recovered from an initial failure to spot the potential of smartphones. Less than two years after being written off as an also-ran, Samsung overtook Apple in 2011 to become the global leader by unit sales.

Lee was born on January 9 1942. His success in business contrasted with his poor health for the last decade of his life and he was dogged by family trauma, worst of all being the suicide of his youngest daughter in New York in 2005. Lee’s relationship with his two older brothers disintegrated after he was preferred to them for the Samsung chairmanship, and they sued him for part of his inheritance in an unsuccessful lawsuit.

Lee’s work to transfer control to the next generation has also caused legal problems. His efforts to ensure the transfer of assets to his son Jae-yong were a key factor behind the 2007-09 corruption scandal. But the latter nonetheless took over leadership, although he has been engulfed in protracted legal wrangling over alleged wrongdoing in the succession process. The younger Lee has denied any wrongdoing, saying it was a “normal” succession process.

Most analysts say he will find it almost impossible to oversee growth matching that of the past two decades. That is a tribute, of sorts, to his father’s record.

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Emerging Markets

A harrowing brush with Covid as India is ravaged




As a foreign correspondent, my job is to tell India’s stories, not be part of them. But when I started feeling feverish while writing an article about Covid-19 vaccine policy last month, I had a gut feeling that the Sars-Cov-2 virus had found me.

I hoped it was exhaustion that I’d sleep off but the next day, still feverish, I was urged to take a Covid test. A leading diagnostic lab chain, which earlier had run an efficient home-testing service, had stopped answering its phones and responding to online requests. But a doctor friend persuaded one of the lab’s phlebotomists to collect my sample. Two days later, the results confirmed I was part of the ferocious coronavirus wave battering India and pushing its healthcare system to breaking point.

Over the following days, my physical symptoms remained mild. But it was still harrowing to be sick from a notoriously unpredictable virus knowing that drugs, hospital beds and oxygen were scarce. I suffered constant anxiety knowing I’d struggle to get medical help if I took a turn for the worse.

I quickly discovered that I’d been so focused on avoiding infection that I had no clue what to do once sick. A friend connected me to a Kolkata-based infectious disease specialist, who felt I was at low risk for severe illness. I’d had the first dose of a Covid vaccine 10 days before my fever started. But the doctor urged me to treat the illness aggressively from the start, given the chaos at hospitals.

He prescribed the antiviral drug, favipiravir, now undergoing clinical trials in the UK as a potential Covid-19 therapy but already approved in India for emergency use. Many of his patients had taken it, he said, and none suffered severely, including people in their 90s.

Normally, I’m reluctant to medicate. I knew favipiravir’s effectiveness as a coronavirus treatment wasn’t yet scientifically validated. But with hospitals turning away ailing patients, the logic of taking an experimental drug made sense. The challenge, I discovered, was to get hold of it.

I called five pharmacies, but all had run out of stock. A friend called six more to no avail. I panicked — the doctor wanted me to start the drug fast and Delhi was hours from the start of a weekend curfew. Then a friend, who’d heard I was Covid-19 positive, called.

“I’m looking for this drug,” I told her. “Any idea where I can get it?” She said she’d check. It turned out that people with foresight had prepared small emergency drug stashes. Her friend had such a stash and was willing to share it.

I was elated to get the pills to start treatment that night. But it wasn’t enough for the prescribed course. Days later I spent hours calling pharmacies in an unsuccessful hunt for more, before finally begging an industry friend to help.

My difficulties pale in comparison with the desperation, anger and grief beyond my sickroom. My Twitter feed was filled with pleas for hospital beds, oxygen cylinders, the antiviral remdesivir, plasma or a place in an intensive care unit. Top hospitals begged on Twitter for refills of dwindling oxygen supplies. Friends and many professional contacts were fighting for their lives. Doctor friends were weeping with impotent rage.

There was much grim news of death. A former Indian ambassador died after hours waiting in a hospital parking lot for admission; inpatients whose oxygen ran out; a top politician’s 34-year-old son, young journalists. Crematoriums struggled with an unprecedented flow of bodies.

I decided I had to tune out of the unfolding crisis, to ensure my physical recovery and to protect my mental health. I stopped checking Twitter. Newspapers piled up, unread.

Once I felt better and tuned back, I saw Narendra Modi’s government had cynically expanded eligibility for vaccination to all over the age of 18, despite an acute shortage of jabs.

And with thousands dying daily, often for want of medical help, the health minister was callously citing dubious official data to claim India’s Covid fatality rate was lower than richer countries — hardly consolation to grief-stricken families.

Today, I’ve recovered from my encounter with the virus. It will take far longer to get over the trauma of watching this calamity engulf the place I call home.

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Indian foreign minister self-isolates after Covid cases detected in G7 delegation




India’s foreign minister on Wednesday said that he was self-isolating after two members of the country’s delegation to the G7 meetings in London tested positive for coronavirus.

The face-to-face meetings in the UK capital began on Monday and are scheduled to end on Wednesday. Representatives from G7 countries such as Canada, Germany and France are attending alongside Australia and India as the UK seeks to strengthen its ties within the Indo-Pacific region.

Subrahmanyam Jaishankar, India’s external affairs minister, confirmed on Twitter that he was informed on Tuesday evening that he had been exposed to a possible Covid-19 case.

“As a measure of abundant caution and also out of consideration for others, I decided to conduct my engagements in the virtual mode,” he added. It is understood that the rest of the Indian delegation will self- isolate for the remainder of the G7 meetings.

Jaishankar held a socially distanced meeting with UK home secretary Priti Patel on Tuesday, where two agreed on a “migration and mobility deal” which will provide a “bespoke route” for young professionals from India looking to live and work in the UK. He met Antony Blinken, the US secretary of state, earlier this week.

“We deeply regret that foreign minister Jaishankar will be unable to attend the meeting today in person,” a senior UK diplomat said. “(He) will now attend virtually, but this is exactly why we have put in place strict Covid protocols and daily testing.”

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Blinken rejects claims of ‘cold war’ between US and China




America’s top diplomat Antony Blinken has rejected claims the US is entering a cold war with China during a visit to London to discuss with G7 counterparts how best to respond to the challenges posed by Beijing.

In an interview with Financial Times editor Roula Khalaf for The Global Boardroom, Blinken said he resisted “putting labels on most relationships including this one, because it’s complex”.

“This is not about initiating a cold war, this is all about doing our part to make sure that democracy is strong, resilient, and meeting the needs of its people,” he said, referring to Washington’s intention to hold a “democracy summit” later in the year.

Joe Biden, US president, has promised to “win” the 21st century in what he has portrayed as a “battle” between democracies and autocracies and has pointed to Chinese activities that the US says are damaging the international order.

Relations between the US and China deteriorated under the Trump administration and the countries remain at loggerheads over security, human rights, intellectual property, and rules governing trade and commerce.

“We’re not asking countries to choose [between the US and China],” Blinken added in remarks at the FT Live event on Tuesday, which were broadcast after G7 countries opened their meeting with a session on China.

Ahead of the event, a US state department official said the G7 session on Tuesday morning was intended to be a forum to discuss how to work closely with allies and partners to address shared challenges from a position of strength.

Antony Blinken, US secretary of state, far right, is meeting with G7 leaders in London to discuss how best to respond to the challenges posed by Beijing © Stefan Rousseau/Pool/Getty

Blinken said the US recognised that countries have complicated relationships, including with China, and that the US did not believe other countries’ economic relationships with Beijing “need to be cut off or ended”. However, he said the US wanted to foster and protect basic rules governing commerce, the environment, intellectual property and technology.

Biden has surprised many foreign policy experts by taking an approach to China that has more in common than not with the harsh stance taken by former president Donald Trump. One big difference has been a significant effort to work with US allies and partners to create more leverage to deal with Beijing.

His approach has been welcomed by allies in Asia, such as Japan and Australia. But there is concern in the EU about the bloc being caught between the US and China, particularly in Germany.

Angela Merkel, German chancellor, has said the EU and the US do not agree on everything and that it was “absolutely clear” that their interests were “not identical” when it came to China.

The G7 comprises the US, Canada, UK, France, Germany, Italy and Japan, and this year the UK has also invited Australia, India, South Korea, Brunei and South Africa to attend as guests.

Biden recently convened the first leader-level meeting of the Quad — a group that includes the US, Japan, India and Australia — as part of this effort to work with allies to counter Beijing.

Evan Medeiros, professor of Asian studies at Georgetown University, said the Biden team’s engagement with the G7 formed part of its effort to assemble coalitions to tackle the China challenge.

He said the administration was pursuing the right strategy by saying the US did not want a cold war and did not want countries to pick sides, but he added: “The reality is everybody is going to have to make choices when it comes to China.”

But Bonnie Glaser, Asia programme director at the German Marshall Fund of the US, highlighted concerns among some that Washington’s stance was “too aggressive and too confrontational”.

“I definitely have the impression that the Germans and some other Europeans are really quite unhappy about the US approach to China,” she said.

In March, the US, EU, UK and Canada co-ordinated the imposition of sanctions on Chinese officials over the country’s treatment of Uyghur Muslims in the western Xinjiang region, triggering retaliatory sanctions from Beijing.

Biden administration officials including Blinken frame the future of the US relationship with China as “competitive, collaborative and adversarial”, depending on the issue in question.

Washington wants to co-operate with Beijing on foreign policy issues including Iran, North Korea and climate change while also defending US interests in the military, technological and economic spheres and pushing back on human rights abuses in Hong Kong and Xinjiang.

Blinken said that “a democratic recession around the world” had occurred over the past 15 years, but admitted the US had its own challenges “visible for the world to see” when it comes to democracy, in a thinly veiled reference to the disputed presidential election and January 6 Capitol attacks.

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