The man credited with turning Samsung into one of the world’s most powerful companies is in recovery after suffering a heart attack on Saturday night. In an official statement Samsung confirmed Chairman Lee Kun-hee, 72, was rushed to hospital and treated with CPR. Both the company and hospital officials have declined to say how long he is expected to be hospitalised.
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Forbes ranks Lee Kun-hee as the richest man in Korea and one of the wealthiest in the world with a net worth of $12.9 billion. In 2013 he also came 41st in Forbes’ rank of the World’s Most Powerful People.
Lee has run Samsung since December 1987 taking over just weeks after the death of his father, Samsung founder Lee Byung-chul. Lee Kun-hee is credited with transforming the family run business from a national, budget-focused brand into a global powerhouse.
Today Samsung revenues are 39x what they were in 1987, it has assets in excess of $600 billion and generates 20% of South Korea’s GDP. While known for its dominance in electronics – particularly smartphones, tablets and televisions – Samsung employs over 400,000 people across more than 80 diversified business units. These cover everything from shipbuilding and jet engines to investment banking and medical services.
Concerns for Lee’s health have been growing. Since being treated for lung cancer in 1999 he has had respiratory problems and in August last year he was hospitalised with pneumonia. Much like succeeding Steve Jobs at Apple, finding Lee’s eventual successor is a red hot topic in Asia. It also faces the same doubts as to whether anyone can lead Samsung like Lee Kun-hee.
The obvious candidate is Jay Y. Lee, Lee Kun-hee’s son and Samsung Vice Chairman. While groomed for many years, doubts remain over the younger Lee, 45, as he doesn’t hold an operational title. Instead Lee Kun-hee runs day-to-day operations with three co-CEOs and retains the final say over key decisions.
Lee’s reign has not been without controversy. He reigned in April 2008 after tax evasion and bribery accusations and was handed a 110 billion won ($107 million) fine and suspended three year prison sentence. He was ultimately given a personal pardon by South Korean president Lee Myung-bak so that he could remain on the International Olympic Committee and returned as Samsung head in March 2010.
While not unexpected, Lee Kun-hee’s fading health comes at a crucial time for Samsung. The company finds itself at a crossroads where its smartphone sales are levelling off, it is embroiled in legal battles with Apple and its early moves into wearables like the Galaxy Gear 2 (below) have so far been a critical and commercial failure.
Furthermore its much delayed plans to launch Tizen, a rival to Android, are finally coming to a head with a flagship Tizen smartphone based on the Galaxy S5 due for launch in the next few months. It has long been speculated that Samsung would like to abandon Android completely given Google’s increasing control and it is no coincidence that Tizen looks identical to the TouchWiz interface Samsung applies to its Android phones and tablets.
Needless to say, Samsung has played down the implications of Lee Kun-hee’s hospitalisation simply stating “There has been no disruption in the group’s day-to-day operation”. But a day of reckoning awaits.
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