The change of Samsung: The control of the Li clan is in jeopardy

The Li family, which controls 74 of Samsung's companies with less than 2% per cent of its holdings, writes that Samsung's succession plans have been the focus of attention as Samsung chairman Lee Kun-hee's health condition has deteriorated. However, because of the high tax burden and the challenge of equity, the Li clan's control over its family business is also under threat. The following is the full text of the article: when Lee Kun-hee, the head of Samsung Group, was admitted into the third month, his family was also troubled and was likely to lose control of his family business. The 72-Year-old Mr Lee inherited Samsung's ownership from his father in 27, surpassing Sony and Nokia and even leading the handset business. However, his 46-year-old son, Lee, is struggling to maintain the same influence, mainly because he faces a huge estate tax of more than 5 billion dollars, and South Korea no longer supports the practice of controlling conglomerates through cross shareholdings. Through a well-organized network of cross shareholdings, the Li clan controls 74 companies in the Samsung Group by less than 2% per cent of its holdings. As Samsung Electronics faces severe challenges in the smartphone market, the Lee, which has lived in the shadow of his father since 1991, has had to loosen the control of the Lee clan and to lower its wariness of outside shareholders. Samsung became the world leader, because the chairman Lee Kun-hee has a firm grip on management, so that it is unaffected by the outside. Kyung Yu, a professor at the School of Management, said that once the cross shareholding structure was broken, the Li clan's control of the Samsung Group would be weakened and they would be more vulnerable to outside influence. Claire Kim, Clare Kim Securities analyst at South Korea, believes shareholders may be pressuring the company to increase its dividend as the cash reserves of Samsung Electronics gradually increase (at $58 billion trillion). And as performance growth slows, they could also force Samsung to start a strategic realignment or cut capital spending.