A South Korean special prosecutor investigating corruption at the
Samsung Group on Thursday indicted Lee Kun Hee, the head of the
country's largest conglomerate, for tax evasion and breach of trust.
Following are some key facts about the Samsung Group and the Lee family that founded and runs it:
THE BEGINNING
Samsung was started in 1938 when Lee Byung Chul (1910-1987), the son
of a wealthy landowner who was in the rice milling business, opened a
trading company.
To increase revenue, Lee added a trucking business but Samsung,
which means "three stars," did not take off until during and after the
1950-1953 Korean War when Lee added a textile company, started his
country's first major sugar refinery and built a powerful trading
network.
THE GREAT EXPANSION
In the 1960s and 1970s, Lee adds a dizzying array of companies to
the group that included the Shinsegae department store, the JoongAng
Ilbo daily Newspaper, a shipbuilder, a chemical company and most
importantly, in 1969, Samsung Electronics. Several firms were later
spun off.
During this period, the family-run conglomerates known as "chaebol"
formed a close alliance with the government run by the authoritarian
President Park Chung-hee to lift the economy. Samsung was an also-ran
at this time with Daewoo, Hyundai and Lucky Goldstar, now known as LG,
at the top of the pack.
THE TRANSITION
Lee Kun Hee, after being groomed for the top spot for years,
officially took over when his father died in 1987. Father and son both
went to university in Japan.
The younger Lee changed the focus of the company from one that
mostly produced mass quantities of lower-end goods to one that would
use innovation and superior goods to build a respected brand name.
Under his rein, Samsung became the country's largest conglomerate
with about 60 affiliates, accounting for about one fifth of the
country's exports.
Samsung Electronics became the world's biggest maker of memory
chips. The group also includes Samsung Heavy Industries, the world's
No. 2 shipbuilder, and South Korea's biggest life insurance company
Samsung Life.
THE NEXT GENERATION
Lee Kun Hee's son, Lee Jae Yong, began working in a Samsung Group's
division in 1991 and has spent many years with the flagship Samsung
Electronics. Considered as the heir to throne, he is now chief customer
officer at Samsung Electronics.
In 2005, a Seoul court found two former Samsung executives guilty of
conspiring in a 1996 deal to help Lee Jae Yong and other children of
Lee Kun Hee buy a majority stake in Samsung Everland, which serves as
the group's de facto holding firm.
