Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey there,
Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland.
Speaker 1: I'm an executive producer with iHeart Podcasts and How the
Speaker 1: Tech Are Yet. So it is Friday again. It's time
Speaker 1: for another classic episode. And last week we did the
Speaker 1: Samsung Story Part one, so shocking. We're gonna do the
Speaker 1: Samsung Story Part two today. This originally published on May
Speaker 1: twenty sixth, twenty seventeen. Hope you enjoy Samsung, as it
Speaker 1: turns out, is a conglomeration of companies that do lots
Speaker 1: of different things. Electronics is just part of it. It's
Speaker 1: one of the more forward facing components, especially outside of Korea,
Speaker 1: but it's just one element of the overall company. Also,
Speaker 1: keep in mind, I'm talking about a Korean company with
Speaker 1: a lot of Korean names. So again, I apologize right
Speaker 1: up front for the numerous occasions I'm sure I will
Speaker 1: mispronounce Korean names. It is not through any lack of respect,
Speaker 1: but rather just a simple ignorance of the correct pronunciations
Speaker 1: for that language. I will do the best I can. However,
Speaker 1: it will get a little confusing because I'm going to
Speaker 1: talk a lot about the family who was in charge
Speaker 1: of Samsung, and there are an awful lot of them,
Speaker 1: but we will get to that a bit later. Now,
Speaker 1: If you remember, I left off at the point when
Speaker 1: Samsung began to produce its first televisions and washing machines.
Speaker 1: That brings us up to the nineteen seventies. So what
Speaker 1: was going on in Korea during that time? Well, you
Speaker 1: might remember in the last episode I told you that
Speaker 1: Korea had come under the rule of a military leader,
Speaker 1: a general named Bach Jonghi or also sometimes spelled Park
Speaker 1: chung Hi. These names are anglicized version of the Korean names,
Speaker 1: so often it's as close to an approximation of an
Speaker 1: anglicized pronunciation as we can get. So there are different spellings.
Speaker 1: Park Chunghi is probably the most common, but I've also
Speaker 1: seen Bach Chonghi same person. However. In fact, this is
Speaker 1: a good time for me to mention this. In the
Speaker 1: previous episode, I talked about a US backed leader, and
Speaker 1: I talked about THEIM a lot. I said Li Sung
Speaker 1: Man and also mentioned a man named singman Ri. Both
Speaker 1: of those names are actually the same person. See in
Speaker 1: the Western world, we will say a person's surname last.
Speaker 1: But in Asia and many Asian cultures at any rate,
Speaker 1: you say the surname first, So Lee is the surname
Speaker 1: Li sungman or singman Ri is the way that we
Speaker 1: often see it spelled, depending upon the source you're looking at.
Speaker 1: So I know it gets a little confusing, but these
Speaker 1: are the same people. They are just anglicized versions of
Speaker 1: the name. Anyway, let's go back to Park Chunghi, the general,
Speaker 1: the person who had been in charge of South Korea
Speaker 1: in nineteen seventy two. He put the country under martial
Speaker 1: law and solidified his power in South Korea, they would
Speaker 1: hold elections and Park Chunghi would win those elections. But
Speaker 1: there were a lot of people who essentially said that
Speaker 1: Park Chunghi was really just a military dictator. Just a
Speaker 1: military dictator is probably the wrong way of saying it,
Speaker 1: But he was a military dictator as opposed to a
Speaker 1: legally elected president, according to whom you ask. Meanwhile, at
Speaker 1: the same time, South Korea government officials were starting up
Speaker 1: talks with their counterparts in North Korea, and the two
Speaker 1: countries talked about wanting to reunite, to have a reunification
Speaker 1: of Korea. They said that there were a lot of
Speaker 1: requirements for that. One of the big ones was that
Speaker 1: they demanded no outside interference. They didn't want other entities
Speaker 1: coming into Korea to try and guide the process. Remember,
Speaker 1: Korea had been the subject of a lot of interference
Speaker 1: from the Soviet Union, from the United States of America
Speaker 1: before that, Japan, and China, so they were really determined
Speaker 1: to do this themselves. But spoiler alert, that never really happened.
Speaker 1: In nineteen seventy nine, the head of the Korean Intelligence Service,
Speaker 1: Kim jagyu, assassinated Park Chunghi, so, the head of the
Speaker 1: Korean version of the CIA, assassinated the president of the country.
Speaker 1: After that, there was a brief period of civilian rule
Speaker 1: where the Prime Minister assumed roles of the president before
Speaker 1: another general. This one fellow by the name of General
Speaker 1: Chu du Pan, receives power in nineteen eighty and thus
Speaker 1: returned the country back to a dictatorship with token elections,
Speaker 1: and that would continue to be the case until the
Speaker 1: late nineteen eighties. So Korea still had a tumultuous and
Speaker 1: often violent power structure, with people struggling to rule the
Speaker 1: country in different ways. Remember, even though you know you
Speaker 1: would say that that Park Chunghi was a dictator. He
Speaker 1: was largely seen as someone who worked very hard to
Speaker 1: improve conditions in Korea, so he wasn't just exploiting his power,
Speaker 1: at least not in the view of many people. However,
Speaker 1: that being said, he also wasn't willing to have a
Speaker 1: transition of that power, and thus eventually he was assassinated.
Speaker 1: So very complicated political structure in Korea at the time,
Speaker 1: and despite all that political chaos, Samsung continued to do well.
Speaker 1: I'll talk more about how they did that a little
Speaker 1: bit later in this episode. The company had, for one thing,
Speaker 1: diversified quite a bit. It was getting into so many
Speaker 1: different industries and it was playing a key component in
Speaker 1: the economy of South Korea. It was also creating Korean
Speaker 1: electronics with Korean parts, so they weren't importing elements and
Speaker 1: then building television sets and then selling them. They were
Speaker 1: making all of this stuff piece by piece. This helped
Speaker 1: establish Korea as one of what was called the Four
Speaker 1: Little Dragons. The Four Little Dragons were nations in East
Speaker 1: Asia that were very rapidly expanding economically and technologically, and
Speaker 1: they also included Taiwan, Singapore, and Hong Kong, so these
Speaker 1: Asian countries were really quickly catching up to other nations
Speaker 1: like Japan and China. In nineteen seventy seven, Samsung began
Speaker 1: producing color televisions and exporting them to Panama. So this
Speaker 1: was a humble step toward Samsung becoming a global player
Speaker 1: in consumer electronics. Before that, they had really been selling
Speaker 1: mainly to South Korea, but now they were expanding beyond that,
Speaker 1: and they were determined to really continue this level of
Speaker 1: success with all different types of electronics. Around the same time,
Speaker 1: Samsung began to produce other products in consumer electronics, including
Speaker 1: air conditioners, which I have covered in previous episodes of
Speaker 1: tech Stuff and the microwave, and there is also a
Speaker 1: classic episode of tech Stuff about how the microwave works.
Speaker 1: So I'm not going to go into a full explanation,
Speaker 1: but because this episode is going to be a lot
Speaker 1: about corporate politics and actual politics because of the complicated
Speaker 1: nature of Korean business, I thought why not go ahead
Speaker 1: and have at least a brief explanation on the science
Speaker 1: slash technology side of microwaves to really have this podcast
Speaker 1: earn the name of tech Stuff, because otherwise we're just
Speaker 1: going to be talking about lots of economics, politics, and
Speaker 1: very complicated issues. So I'm going to give you some
Speaker 1: highlights of how microwave ovens work. So, the radiation micro waves.
Speaker 1: Microwaves are in the electromagnetic spectrum in between infrared and
Speaker 1: radio waves, so they are longer waves than visible light.
Speaker 1: Microwave ovens produce microwaves that a frequency of two point
Speaker 1: four or five gigaherts. That's two point four or five
Speaker 1: billion wavelengths passing through a given point within a second. Now,
Speaker 1: certain stuff like fats, sugars, and water absorb waves that
Speaker 1: are at this two point four or five gigahertz frequency.
Speaker 1: As they absorb those waves, their atoms begin to get excited.
Speaker 1: That means they start to move around, and we call
Speaker 1: this heat. Right, if atoms are moving around a lot,
Speaker 1: they are warm, they're giving off heat, and they're giving
Speaker 1: off that form of energy. Likewise, if you apply heat
Speaker 1: to materials, you start to make their atoms move around
Speaker 1: more rapidly. So stuff like glass, ceramics, and plastics do
Speaker 1: not absorb waves at that frequency. So if you were
Speaker 1: to put a glass like a glass container in a
Speaker 1: microwave and you turned it on and then you took
Speaker 1: the glass container out, assuming there was nothing on it
Speaker 1: to heat up to absorb those microwaves. It should not
Speaker 1: be really any significantly warmer to the touch, So that's
Speaker 1: why the food in a microwave will heat up, but
Speaker 1: the containers do not. Metal, by the way, reflects microwaves,
Speaker 1: which is why the interior of most microwave ovens tends
Speaker 1: to be metallic. It's to reflect waves back into the
Speaker 1: oven in order to give the food a better chance
Speaker 1: at absorbing the waves and heating up and cooking in
Speaker 1: the process. This is also why we say that this
Speaker 1: kind of food cooks from the inside out, and you're
Speaker 1: not applying any heat to a surface, so you don't
Speaker 1: get that seared nature you would get if you were
Speaker 1: to say, cook in a pan. One other thing, microwaves
Speaker 1: are not a form of ionizing radiation. That means that
Speaker 1: the waves don't carry enough energy to ionize atoms or molecules,
Speaker 1: or to simplify it even further, it means microwaves don't
Speaker 1: pack enough of a punch to strip electrons away from atoms.
Speaker 1: Ionizing radiation includes stuff like ultraviolet radiation, X rays and
Speaker 1: gamma rays, and they do have enough energy to strip
Speaker 1: away electrons, and if you are exposed to that sort
Speaker 1: of radiation, you can suffer immediate and long term damage
Speaker 1: as a result. So in a short term, very brief exposure,
Speaker 1: you might suffer burns. In the case of ultraviolet radiation,
Speaker 1: it may take a little bit longer for you to
Speaker 1: actually suffer burns, but you know that's what sunburn is.
Speaker 1: In the long run, you're talking about bigger risks like cancer,
Speaker 1: so you want to really minimize your exposure to ionizing radiation.
Speaker 1: But happily, microwaves are not in that category, nor are
Speaker 1: radio waves. It's the stuff in those bigger wavelengths. They
Speaker 1: don't have the energy to do that, which is why
Speaker 1: you shouldn't have to worry about microwaves or radio waves
Speaker 1: or anything like that causing you any harm. They just
Speaker 1: don't have the energy to do that to you. Whereas
Speaker 1: X rays, gamma rays, that kind of stuff certainly has
Speaker 1: that sort of energy. Now, if you want to learn
Speaker 1: more about how microwaves work, including how they actually generate
Speaker 1: the microwave radiation in the first place, make sure you
Speaker 1: check out that Classic Tech Stuff episode. It is titled
Speaker 1: how microwave ovens Work. Yeah, we thought long and hard
Speaker 1: about that title anyway, that episode came out way back
Speaker 1: on March first, twenty ten. Let's get back to Samsung.
Speaker 1: In nineteen eighty Samsung made another big acquisition. Remember that's
Speaker 1: how this company was really growing. It was buying up
Speaker 1: other companies and getting involved in as many different industries
Speaker 1: as possible. This time it was a telecommunications hardware company
Speaker 1: called hanguk Jinja Tungsen. The number one product the company
Speaker 1: made was telephones boards, so they were starting to install
Speaker 1: more telephone infrastructure in Korea. Samsung soon expanded this to
Speaker 1: produce telephone and faxt systems and much later on mobile phones.
Speaker 1: More on Samsung's mobile phones. A bit later, Samsung expanded
Speaker 1: the operations of its electronics division into other nations, including
Speaker 1: the United Kingdom in the US, and the company had
Speaker 1: become an empire. And that's when it lost its emperor.
Speaker 1: It was nineteen eighty seven and Li Biongchol, who was
Speaker 1: the man who founded Samsung when he was just twenty
Speaker 1: eight years old, passed away. Now, if you listened to
Speaker 1: our last episode, you know he had come from a
Speaker 1: wealthy family to begin with, but his company had elevated
Speaker 1: him and his family to truly wealthy status billionaires. Now
Speaker 1: at the time of his death, he had one of
Speaker 1: the largest private collections of Korean art in all of
Speaker 1: the nation, which was opened up to the public after
Speaker 1: his passing. He had ten children, six daughters and four sons.
Speaker 1: There were also rumors of him having other children with
Speaker 1: other women besides his wife in Korea, but that was
Speaker 1: a rumor. That the family is very secretive in the
Speaker 1: first place, so it's not like this was necessarily open information. Now,
Speaker 1: at the end of this podcast, I'm going to trace
Speaker 1: the very complicated history of Lee's family. I'll do this
Speaker 1: because in Korea it is still traditional for families to
Speaker 1: keep control over businesses, so you can inherit a position
Speaker 1: of leadership in a company. The world of board of
Speaker 1: directors and choosing a CEO isn't the way things are
Speaker 1: done in Korea, at least not for a lot of companies.
Speaker 1: They follow a more traditional pathway and that has caused
Speaker 1: some consternation. As it turns out, now the company split
Speaker 1: into four major business groups that eventually became their own
Speaker 1: individual companies, and at least according to the people running
Speaker 1: those companies, have nothing to do directly with one another. Anymore.
Speaker 1: Those include the Shinsegae Group or Shinsega I guess group,
Speaker 1: I should say, which is mostly concerned with retail businesses,
Speaker 1: you know, department stores, that kind of thing. There's the
Speaker 1: CJ Group, which includes businesses in food, chemical, entertainment industries.
Speaker 1: There's the Hensall Group, which includes telecommunications and paper manufacturing industries.
Speaker 1: And then you have the Samsung Group, which is pretty
Speaker 1: much everything else. So for right now, the only important
Speaker 1: thing you need to remember is that Lee byungchal, the
Speaker 1: founder of Samsung, died in nineteen eighty seven, and I'll
Speaker 1: try to focus exclusively on Samsung Electronics from here on out,
Speaker 1: though I should mention the company as a whole consisted
Speaker 1: of eighty smaller companies at one point or another, eighty.
Speaker 1: It was a really a conglomerate in the true sense
Speaker 1: of the word. It was a company filled with other companies. Many,
Speaker 1: in fact, most of those companies had nothing to do
Speaker 1: with consumer electronics. In the late eighties and early nineties,
Speaker 1: Samsung Electronics began opening manufacturing facilities in different parts of
Speaker 1: the world. The company was really making a name for itself,
Speaker 1: becoming a global player in the electronics space. This is
Speaker 1: pretty remarkable when you remember that companies like Sony had
Speaker 1: been in the electronics industry for decades, whereas Samsung really
Speaker 1: only began to dive into it in nineteen sixty nine
Speaker 1: nineteen seventy, so they had a lot of catching up
Speaker 1: to do. Samsung continued to expand the types of electronics
Speaker 1: it produced in the nineteen eighties, like I said, with
Speaker 1: air conditioners and microwaves starting off, but by nineteen eighty
Speaker 1: three the company also began to get into the personal
Speaker 1: computer business. The very first Samsung computer was the SPC
Speaker 1: one thousand, which came out in March nineteen eighty three,
Speaker 1: and it was an eight bit personal comput which looked
Speaker 1: more like a giant electronic typewriter. It had sixty four
Speaker 1: whole kilobytes of RAM and before megahertz processor. Yeah it was.
Speaker 1: From the time it was, you know, it was good,
Speaker 1: but by today's standards it is it is almost laughably underpowered.
Speaker 1: But we have Moore's law to thank for that. The
Speaker 1: computer included the keyboard, a game pad, external disk drives,
Speaker 1: and a TV like monitor and you would hook them
Speaker 1: all up and then you'd be able to run stuff
Speaker 1: using the DOS operating system. Good times in nineteen eighty four,
Speaker 1: Samsung began to export VCRs to the United States. And
Speaker 1: I've covered VCRs in the past, including a deep dive
Speaker 1: on the format wars between VHS and Betamax, so I'm
Speaker 1: not going to really dive into it again. Here you
Speaker 1: can listen to that classic episode of tech Stuff if
Speaker 1: you like. And in nineteen eighty six, Samsung created what
Speaker 1: was then the smallest videotape recorder, a four millimeter videotape recorder.
Speaker 1: By the end of the nineteen eighties, the company's products
Speaker 1: could be found on store shelves around the world, so
Speaker 1: they really made rapid progress. From the mid seventies up
Speaker 1: to the late eighties, TVs were still leading the way,
Speaker 1: with Samsung's twenty million color television produced in nineteen eighty nine.
Speaker 1: The company developed its first mobile phone handset in nineteen
Speaker 1: ninety one, though it would continue to work on the
Speaker 1: software side and the systems side for another year. By
Speaker 1: nineteen ninety two, Samsung had become the global leader in
Speaker 1: producing memory chips for electronics, so essentially RAM and it
Speaker 1: fell only behind Intel for chip making in general, so
Speaker 1: Intel was the number one producer of computer chips In
Speaker 1: nineteen ninety two, and Samsung was number two, again, a
Speaker 1: remarkable story for a company that had only recently started
Speaker 1: to get into electronics at all. Samsung pioneered work in
Speaker 1: building LCD display in the mid nineties, and if you
Speaker 1: listen to my history of TV series, you know that
Speaker 1: the LCD panels really helped push televisions into a new era,
Speaker 1: allowing for a thinner form factor in flat screen TVs.
Speaker 1: Samsung Electronics would end up making millions of dollars by
Speaker 1: licensing LCD panel technology to other companies that became a
Speaker 1: chief source of revenue for the for the Samsung Electronics division.
Speaker 1: Also in nineteen ninety two, Samsung began manufacturing in China
Speaker 1: and producing computer components such as RAM and hard disk drives,
Speaker 1: with a two hundred and fifty megabyte drive released that year,
Speaker 1: which again sounds like nothing at all. Two hundred and
Speaker 1: fifty megabytes. I mean, you can get multi gigs on
Speaker 1: a single flash drive these days, but back then it
Speaker 1: was pretty impressive. Samsung was also producing industrial robots at
Speaker 1: this time and managed to hit the ten million products
Speaker 1: shipped by the end of nineteen ninety two, and by products,
Speaker 1: i'm talking specifically robots they produced ten milli billion industrial
Speaker 1: robots by the end of nineteen ninety two. That's pretty incredible. Now,
Speaker 1: I've got a lot more to talk about with Samsung's electronics,
Speaker 1: but before I dive into the next section, let's take
Speaker 1: a quick break to thank our sponsor. In nineteen ninety three,
Speaker 1: Samsung's Advanced Institute of Technology, also known as SAIT or SAT,
Speaker 1: developed the first digital versatile disc recorder or dvd R device.
Speaker 1: I guess I mean it couldn't have been the DVD
Speaker 1: we all know, because that didn't exist in nineteen ninety three.
Speaker 1: That wouldn't be introduced until nineteen ninety five as a
Speaker 1: joint project between Sony and Panasonic. Honestly, I'm not really
Speaker 1: sure how Samsung's device fits into the history of DVDs
Speaker 1: and dvd rs. In particular, I found the entry that
Speaker 1: the company first produced this first DVD R in nineteen
Speaker 1: ninety three on Samsung's actual website, so this is according
Speaker 1: to the company itself. But that really strikes me as
Speaker 1: strange because as far as I know, the standard didn't
Speaker 1: really exist until nineteen ninety five. So how do you
Speaker 1: produce a product two years before you've figured out the standard.
Speaker 1: It's possible that the entry is erroneous, but it did
Speaker 1: come from Samsung itself, so I thought it would include it, so,
Speaker 1: you know, grain of salt. It may very well be
Speaker 1: that they produced a DVDR on an early version of
Speaker 1: what would become the standard in ninety five, but it
Speaker 1: just seems a bit early to me. Totally possible, just
Speaker 1: something that I did not hear about when I was
Speaker 1: researching DVDs years ago. In the mid nineties, Samsung products
Speaker 1: began to number on the top sellers for certain categories
Speaker 1: like LCD screens. Samsung was definitely leading the way there. Meanwhile,
Speaker 1: Lee kun He, who was a son of Li b
Speaker 1: yung Chol. Remember I said Lie Byung Chol had ten children. Well,
Speaker 1: Lee kun He, the third son. He would join the
Speaker 1: International Olympic Committee in the mid nineties, and that move
Speaker 1: is really important to note because it illustrates how critical
Speaker 1: a role Samsung was to the country and economy of Korea,
Speaker 1: and it also showed how critical the Lee family was
Speaker 1: and how strong their political influence was at the time.
Speaker 1: I have a lot more to say about that. Toward
Speaker 1: the end of this episode. In ninety four, Samsung unveiled
Speaker 1: the first four power zoom camera that came from Samsung Aeronautics,
Speaker 1: and in nineteen ninety five, Samsung launched the Samsung Entertainment Group.
Speaker 1: That same year site you know sait showed off a
Speaker 1: real time MPEG three technology. And then there was a
Speaker 1: story from that same year or around ninety five. I
Speaker 1: guess that Lee Kunhe, who again was the head of
Speaker 1: Samsung Electronics at that time and in fact still is today,
Speaker 1: ordered an entire your inventory of smartphones destroyed because they
Speaker 1: apparently did not work properly. So the story was that
Speaker 1: an early smartphone really an internet connected phone, it wasn't
Speaker 1: a smartphone the way we would imagine today, didn't work
Speaker 1: properly as it came out of production, and so rather
Speaker 1: than trying to fix the inventory, leekhen He just ordered
Speaker 1: them all to be burned. Samsung obviously didn't give up
Speaker 1: on the mobile business, and in fact, eventually the mobile
Speaker 1: business would become one of the most profitable divisions within
Speaker 1: the country the year twenty sixty notwithstanding, and in nineteen
Speaker 1: ninety six, the company produced what it claimed to be
Speaker 1: the fastest central processing unit chip, the fastest CPU. They
Speaker 1: called it the Alpha. In nineteen ninety seven, South Korea,
Speaker 1: along with countries like Indonesia, Thailand, and the Philippines, were
Speaker 1: all caught in a terrible financial crisis. It began in
Speaker 1: Thailand with the collapse of Thailand's national currency, and that
Speaker 1: created a sort of ripple effect, and South Korea was
Speaker 1: caught in it. In fact, you could argue caught some
Speaker 1: of the worst of it, with national debts surging as
Speaker 1: a result. Samsung was affected by this problem just like
Speaker 1: other companies were, although Samsung was in good position to
Speaker 1: be able to weather the storm better than a lot
Speaker 1: of its competitors. According to the company's website, Samsung reduced
Speaker 1: the number of affiliated companies to forty five, which is
Speaker 1: still an enormous number of affiliates, right, I mean, that's
Speaker 1: a big conglomerate, and keep in mind this is family
Speaker 1: owned businesses. The company ended up laying off about fifty
Speaker 1: thousand employees and sold ten business units. And one of
Speaker 1: the businesses Samsung sold off was its motor vehicle business
Speaker 1: or it used to be Samsung Motors, but the company
Speaker 1: sold off its interest to Renault at a big loss. Renault.
Speaker 1: Samsung is mostly owned by Renault, like eighty percent ownership
Speaker 1: and less than twenty percent of that ownership falls to Samsung.
Speaker 1: In the late nineteen nineties, Samsung began to produce larger
Speaker 1: LCD screens and they ushered in a new era of
Speaker 1: large flat screen televisions and monitors, and they also started
Speaker 1: mass producing digital televisions. The semiconductor branch of the company
Speaker 1: was busy creating RAM and flash based chips, and in
Speaker 1: nineteen ninety nine, Samsung launched a smartphone. This would be
Speaker 1: a true Internet capable mobile phone handset. But keep in
Speaker 1: mind again, nineteen ninety nine smartphones are not the same
Speaker 1: thing as the smartphones of today. You're still talking about
Speaker 1: pretty simple form factors, not the big touch screens that
Speaker 1: we think about when we use smartphones these days. Now,
Speaker 1: the turn of the millennium, you know, around two thousand,
Speaker 1: Samsung got into the HDTV game. High definition television was
Speaker 1: still pretty young. I mean, it had been pioneered in
Speaker 1: the nineties, but two thousand was when consumers were starting
Speaker 1: to really look at HDTV for the first time in
Speaker 1: a serious way, and Samsung was able to secure a
Speaker 1: spot among giants in the industry like Panasonic and Sony.
Speaker 1: Samsung Television's remained one of the top brands on the market,
Speaker 1: so it's a real triumph for the company to get
Speaker 1: their products right next to these other big name brands,
Speaker 1: considering that they had a much much shorter history in
Speaker 1: the consumer electronics field. Through sheer willpower and lots of investments,
Speaker 1: they were able to do this. By two thousand and one,
Speaker 1: the company's subsidiary, Samsung Techwin would become the supplier for
Speaker 1: engine parts for the Airbus A three eighty and for
Speaker 1: the Boeing seven eighty seven, so they also were doing
Speaker 1: a lot of business to business deals. In two thousand
Speaker 1: and five, Samsung became the largest producer of LCD panels globally.
Speaker 1: The following year, two thousand and six, Samsung and Sony
Speaker 1: he formed a deal in which Samsung would supply Sony
Speaker 1: with LCD panels, and this partnership was almost fifty to fifty,
Speaker 1: almost Samsung owned one share more than Sony did, and
Speaker 1: in twenty eleven, Samsung would buy out Sony's steak in
Speaker 1: this partnership and take over the business completely. As for
Speaker 1: the mobile phones, Samsung really joined the fray in twenty
Speaker 1: ten when it launched the Galaxy S that was its
Speaker 1: first flagship Android phone. Since that time, Samsung and Apple
Speaker 1: would engage in numerous court battles around the world over
Speaker 1: various patents and designs, with each side accusing the other
Speaker 1: of copying the first one. So Apple would say Samsung
Speaker 1: copied us in this way, Samsung would say Apple copied
Speaker 1: us in this way, and these got really complicated and enormous.
Speaker 1: We went into some detail of the story in an
Speaker 1: episode called The Past in Wars, which came out in
Speaker 1: twenty eleven, but obviously those have continued since then. Samsung
Speaker 1: also manufactured the first popular consumer tablet running on Android
Speaker 1: in twenty ten. That was the Galaxy Tab, and it
Speaker 1: began to experiment with smart televisions. Those are TVs that
Speaker 1: pull in content directly from the Internet. You probably are
Speaker 1: familiar with the many of you may have a smart TV.
Speaker 1: I your humble host, am still falling behind the times
Speaker 1: as my TV is not smart, but I got a
Speaker 1: lot of smart stuff connected to it. Anyway. In twenty twelve,
Speaker 1: Samsung actually overtook Nokia or Nokia if you prefer it's
Speaker 1: definitely not Nokia as the number one production company for
Speaker 1: mobile phones. So this is a big deal for Samsung
Speaker 1: to overtake the giant Nokia in twenty twelve. The company
Speaker 1: is a true powerhouse in Korea. It accounts for it
Speaker 1: almost fifteen percent of the gross domestic product in Korea
Speaker 1: back in twenty twelve. And in case you're rusty on
Speaker 1: your economic terms, gross domestic product refers to the total
Speaker 1: value of goods and services originating from inside a country
Speaker 1: within one year. So Samsung's business accounted for fifteen percent
Speaker 1: of all of Korea's GDP in twenty twelve. That is enormous.
Speaker 1: There's no company in the United States that comes close
Speaker 1: to that, and the overall company has an employee base
Speaker 1: of nearly half a million people. Huge, huge, huge company.
Speaker 1: Now they now focus on just a few core businesses,
Speaker 1: which include mobile technology, electronics, and biopharmaceuticals, among a couple
Speaker 1: of others. It really is big. It is the third
Speaker 1: largest company in the world by revenue, and it holds
Speaker 1: more US patents than any other company. It's also involved
Speaker 1: in emerging markets, including stuff like virtual reality and wearables.
Speaker 1: Oh and there's some notable stories about some of the
Speaker 1: Samsung products that are out there. You know, some things
Speaker 1: that suffered a couple of issues. Let's talk about the
Speaker 1: one that I bet you already know I'm referring to
Speaker 1: it is, in fact, the Samsung Galaxy Note seven. This
Speaker 1: phone became infamous after more than one hundred of the
Speaker 1: handsets were reported to have burst into flames. So what happened, Well,
Speaker 1: the phones have lithium ion batteries, and lithium ion batteries
Speaker 1: are flammable. That's why you're not supposed to put any
Speaker 1: in your luggage that you're gonna store unless you're going
Speaker 1: to check. You know, when you go to an airport,
Speaker 1: you don't check bags have lithium ion batteries in them
Speaker 1: because of the potential danger for fire. So what can
Speaker 1: happen is a short circuit can create this dangerous situation.
Speaker 1: And a short circuit is kind of what it sounds like.
Speaker 1: It's when you create a shortcut in a circuit and
Speaker 1: electrons can flow. The can follow the shortcut rather than
Speaker 1: the path you want them to follow. So the basics
Speaker 1: of electronics is this, we harness electrons to do what
Speaker 1: we want them to do, and we do it through
Speaker 1: making all these different pathways and gates, and as long
Speaker 1: as we've got that working, the electrons can only follow
Speaker 1: the gates and go through the gates that are that
Speaker 1: we allow them to go through, and they don't go
Speaker 1: through the ones we don't allow them to go through.
Speaker 1: Our electronics work. But if we create a shortcut so
Speaker 1: that electrons can jump from one pathway to another directly,
Speaker 1: then we have a problem. Electrons will take that path
Speaker 1: of least resistance, no pun intended, and as a result,
Speaker 1: it starts to heat things up. You've got this extra
Speaker 1: energy being given off in the form of heat. So
Speaker 1: with batteries, if there's a puncture between the positive and
Speaker 1: negative electrodes, you can have a direct change of electrons
Speaker 1: and the material will start to heat up. Well, Lithium
Speaker 1: ion batteries are really flammable, so if they heat up enough,
Speaker 1: they'll burst into flames. Originally, Samsung tried to address this
Speaker 1: problem by replace batteries, but they received reports of several
Speaker 1: replaced handsets also catching fire, so the company was forced
Speaker 1: to issue a full recall on the device, or rather
Speaker 1: they did issue a full recall before the force thing
Speaker 1: became a real necessity. Meanwhile, you started seeing representatives at
Speaker 1: airports telling travelers that they had to surrender any Galaxy
Speaker 1: seven phone before getting on a flight. It was really
Speaker 1: bad PR for the company, and Samsung is still kind
Speaker 1: of dealing with that to some extent, although it's already
Speaker 1: starting to slack off a little bit because now we've
Speaker 1: got the Samsung Galaxy S eight coming out as I
Speaker 1: record this podcast, early reviews are coming out about this
Speaker 1: new phone, and most of the reviews I've seen have
Speaker 1: been generally positive. The new phone has a twelve megapixel
Speaker 1: camera on the back and an eight megapixel forward facing camera,
Speaker 1: and Samsung has introduced a personal assistant similar to Siri
Speaker 1: or Alexa called Bixby, which I think is kind of
Speaker 1: adorable and it also the new phone has an iris
Speaker 1: scanner so that you can use that for authentication. You
Speaker 1: can go totally James Bond with your phone. That's pretty cool.
Speaker 1: So the company is still producing these gadgets, not like
Speaker 1: they've backed off after the problem with the Galaxy seven,
Speaker 1: but that was really bad PR for them. I should
Speaker 1: also say that before I get into the next section,
Speaker 1: which is largely about the behind the scenes at Samsung
Speaker 1: and the incredibly complex political struggles within the Lee family,
Speaker 1: that Samsung makes some awesome products. I have several Samsung
Speaker 1: products myself, So while I'm going to talk a lot
Speaker 1: about some of the controversies behind Samsung. I don't want
Speaker 1: that to come across as me slagging the company as
Speaker 1: a whole. I think that there are a lot of
Speaker 1: really good Samsung products out there, but it is really
Speaker 1: fascinating to take a look at the family behind the
Speaker 1: company and their relationships with one another. Because you know,
Speaker 1: this is some game of throne stuff, and I'm not kidding.
Speaker 1: You should probably grab some popcorn and I'm gonna take
Speaker 1: a quick break to thank our sponsor. Let's get back
Speaker 1: to Lee Byung Choll's legacy. His is a complicated story.
Speaker 1: I talked about him a lot in the last episode
Speaker 1: and about his dreams for Samsung and how he wanted
Speaker 1: his company to be a contributor to Korea's economy and
Speaker 1: help the country create an industry of its own. But
Speaker 1: it's not as simple as that or as heroic. Necessarily,
Speaker 1: there's some complications to the tale. He was really intent
Speaker 1: on the success of his company even as you saw
Speaker 1: regime changes. He even led Samsung from Japan. He was
Speaker 1: in Japan when there was the coupdata where Park Chunghi,
Speaker 1: the military general, took control of of the Korean government.
Speaker 1: This was partially because lib Byung chung had developed a
Speaker 1: beneficial relationship with the former leadership of South Korea. You
Speaker 1: know that US backed president that was in charge of
Speaker 1: South Korea before the coup. Data, Well, Yung Chull was
Speaker 1: buddy buddy with that president and had worked very closely
Speaker 1: in order to ensure Samsung's success and the growth of
Speaker 1: the Korean economy. So some would argue that perhaps this
Speaker 1: was evidence of corruption, that perhaps Samsung had been buttering
Speaker 1: up the Korean government or preferential treatment. So because there
Speaker 1: was a coup a'tah where one regime was replacing another,
Speaker 1: that put Yung chul in a delicate situation. Also, according
Speaker 1: to at least some journalist reports, although I have not
Speaker 1: been able to completely verify this, he was in Japan
Speaker 1: at the time, staying at the house of his Japanese wife.
Speaker 1: Back in Korea he had a wife as well, a
Speaker 1: different one at the same time, So according to this journalist,
Speaker 1: he kept two households, one in each nation and was
Speaker 1: practically open about it, or at least didn't go to
Speaker 1: great links to hide it. Again, according to the journalist
Speaker 1: I was reading, but he did return to Korea after
Speaker 1: he was given assurances that he wouldn't be put on
Speaker 1: trial for corruption charges, and again, to be fair, those
Speaker 1: charges wouldn't necessarily be accurate. You know, Samsung had flourished
Speaker 1: under that previous regime, and now you had a new
Speaker 1: regime in place, and that new regime is trying to
Speaker 1: wipe out everything from the previous one away, trying to
Speaker 1: start with a clean slate. So it was a tricky time.
Speaker 1: You could argue that perhaps there was some evidence that
Speaker 1: he had colluded with the president, or maybe it was
Speaker 1: just that, as the story goes, that he was trying
Speaker 1: very hard to make Samsung a power player in the
Speaker 1: East Asian economy. Now, General Park Chunghi gave Samsung some
Speaker 1: preferential treatment that really is beyond question, and also a
Speaker 1: few other Korean companies received this kind of preferential treatment.
Speaker 1: This was in order to encourage an era of industrialization
Speaker 1: and modernization, but the government made out pretty well too
Speaker 1: as a result. So from one point of view, you
Speaker 1: could argue that Samsung had managed to nuzzle up to
Speaker 1: one leader then turn around to get buddy buddy with
Speaker 1: the next one in order to maintain its advantage. But
Speaker 1: from a different point of view, you could say Samsung
Speaker 1: was able to lead the charge in bringing Korea up
Speaker 1: to speed with the rest of the industrialized world in
Speaker 1: a very short span of time. So again I'm not
Speaker 1: trying to demonize Li b yung Chol, but I'm also
Speaker 1: not shying away from the fact that this is complicated. Now,
Speaker 1: in nineteen sixty seven, Lie byung Chung had to officially
Speaker 1: resign as chairman of Samsung. This was due to a
Speaker 1: charge that his second son, Li Changhi, had been smuggling
Speaker 1: saccharin into Korea. So this scandal breaks out, Li byung Chung,
Speaker 1: as part of this news break of his second son
Speaker 1: being part of a smuggling operation, announces that he will
Speaker 1: step down as the head of Samsung Group, and thus
Speaker 1: control of the company passed, as is tradition in South
Speaker 1: Korea to the eldest son that was Limanghi. Now, keep
Speaker 1: in mind, Samsung Group is a company of companies, and
Speaker 1: we're talking around eighty companies at this point. But found
Speaker 1: under Lee byung Chol still had the power to choose
Speaker 1: which of his children would officially lead the company after
Speaker 1: his death, which is common in Korea. Leadership can remain
Speaker 1: within a family and Biungchol watched as his eldest son
Speaker 1: mag he began to alienate the leadership of the various
Speaker 1: divisions within Samsung, and in fact, according to some reports,
Speaker 1: he had even written that within six months he had
Speaker 1: plunged that upper echelon of executive leadership into chaos. There
Speaker 1: were a lot of reports that Monghi was short tempered
Speaker 1: and ill suited for leadership. Meanwhile, Biong Chol's second son,
Speaker 1: changhe tried to position himself into a power position despite
Speaker 1: his previous scandal of smuggling sacrin by talking to the
Speaker 1: President of South Korea and revealing that byung Chol had
Speaker 1: some slush funds that he was hiding from the government,
Speaker 1: presumably for bribery and other purposes. And this is the
Speaker 1: point where we should really just be humming the Game
Speaker 1: of Thrones theme and probably just keep it up for
Speaker 1: the rest of the episode. So Bijung Chol made a
Speaker 1: decision at that point that the ownership of the Samsung
Speaker 1: group would not go to either of his first two
Speaker 1: sons because he felt that they were both plotting against
Speaker 1: him and would be a bad fit. So instead he
Speaker 1: decided that we should go to the third son. Now,
Speaker 1: as you can imagine, this did not exactly go over
Speaker 1: very well within the Lee family. So in nineteen eighty seven,
Speaker 1: when Byung Choal passed away, the control of his company
Speaker 1: went to his third son, Lee Kunhi. Now, Samsung itself
Speaker 1: is what is called a chebol, which is an institution
Speaker 1: peculiar to South Korea. Essentially, at Chaebol is a large
Speaker 1: conglomerate of businesses that more often than not fall under
Speaker 1: a single family's ownership and leadership. And it can get
Speaker 1: really complicated and be really dea and difficult to suss
Speaker 1: out who owns what percentage of which company, so you
Speaker 1: can make a lot of arguments as to whether or
Speaker 1: not things are on the up and up. Well, Lee
Speaker 1: Kunhi became the head of Samsung Group, and individual businesses
Speaker 1: and divisions fell under the control of some of his siblings.
Speaker 1: You might remember I mentioned earlier that Samsung Group kind
Speaker 1: of broke into four major components at this point, well,
Speaker 1: those components went to other siblings. One of those was
Speaker 1: Lie Monghi. He ended up taking control of the CJ Group.
Speaker 1: You remember I mentioned that earlier. Well, later on much
Speaker 1: later on, like in twenty twelve, Lee Mong he and
Speaker 1: one of his sisters would go on to sue Lee
Speaker 1: Kunhi and Li Monghi was accusing his younger brother of
Speaker 1: hiding shares from the company after their father's death, and
Speaker 1: that it would last couple of years, only coming to
Speaker 1: a close in twenty fourteen when Soul's High Court upheld
Speaker 1: a verdict that said Lee Kunhi was innocent of that.
Speaker 1: Really more, it was more about how the claim of
Speaker 1: any sort of claim you would have or inheritance would
Speaker 1: have expired after ten years had passed from the death
Speaker 1: of Jung Choal and Young Chal died in nineteen eighty seven,
Speaker 1: so by twenty twelve it was far too late. But
Speaker 1: that's not the end of the animosity within the Lee household.
Speaker 1: It actually gets very complicated. So one of Bjung Chol's
Speaker 1: daughters still second generation here, her name was Lee Sok
Speaker 1: still is Li Sok. She married into another family in Korea,
Speaker 1: another prominent family, the kium Sung family. Now the Kiumsung
Speaker 1: family is the head of another chabol namely l G,
Speaker 1: and as LG's electronic business began to flourish, this put
Speaker 1: a brain on relations between the kyum Sung and Lee families,
Speaker 1: so that created some more tension inside the family. Now
Speaker 1: getting into the more complications in this web of relationships
Speaker 1: that were tested after Byung Chol's passing, I need to
Speaker 1: talk about some of the other folks. Lee Chang Hi
Speaker 1: founded a company called Sehan, which was an electronics and
Speaker 1: textiles company. Also made one of the first MP three
Speaker 1: players called the MP Men. Chang Hi would pass away
Speaker 1: in nineteen ninety. I think he was the first of
Speaker 1: Byung Chol's children to pass away, so he only you
Speaker 1: know he lived only three years after his father. Well,
Speaker 1: lie In He one of Byung Chol's daughters, another again
Speaker 1: second generation here, became the leader of Samsung's home furnishing businesses,
Speaker 1: and another one of the daughters, Lie Munghi, would end
Speaker 1: up leading Sam Sung's retail businesses. Both groups of businesses
Speaker 1: would split off from Samsung. The home furnishing business split
Speaker 1: off in nineteen ninety one and the retail business split
Speaker 1: off in nineteen ninety seven. I've got some more to
Speaker 1: talk about with Samsung once we come back from this break.
Speaker 1: To thank our sponsors, So Lee and he founded the
Speaker 1: Hansall Group, which is an electronics production company in paper
Speaker 1: manufacturing business and according to Hansaal they have no connection
Speaker 1: with Samsung Group at all, that there's no ownership connection
Speaker 1: between the two. Lie Mjunghi would go on to found
Speaker 1: the Shinsegay Group that was the department store franchise in
Speaker 1: South Korea, and both of them are very powerful leaders
Speaker 1: in Korea's economy. Then you had CJ Child Judan, which
Speaker 1: is a business that sells all sorts of stuff including
Speaker 1: food and biopharmaceuticals. Lie Maghi, the eldest of Biong Chul's sons,
Speaker 1: led this company and then passed it on to his son,
Speaker 1: Lie jay Hun. So Lee jay Hun is third generation.
Speaker 1: He's a grandson of Biyeung Chung. Lie jay Hun led
Speaker 1: c J Child Judang until twenty fourteen, and then he
Speaker 1: was convicted of charges of theft and embezzlement and sentenced
Speaker 1: to four years in prison. He would not be the
Speaker 1: only Lee to be accused of and convicted for charges
Speaker 1: such as these. In nineteen ninety six, in fact, Lee
Speaker 1: Kunhi he's the guy again the third son of the
Speaker 1: founder who would taken over control of Samsung Group. He
Speaker 1: was accused of and convicted four charges of paying bribes
Speaker 1: to Chundu Huan that was the general who took over
Speaker 1: after Park Chunghi's assassination. So du Huan was a president
Speaker 1: of Korea. South Korea and Lee kun He was convicted
Speaker 1: of charges of bribing the government. He also was accused
Speaker 1: of bribing the successor to Chundu Huan, who was Rot Taiwu.
Speaker 1: So nineteen ninety six was a bad year for Lee
Speaker 1: kun He. He had these charges of bribery for two
Speaker 1: of South Korea's recent presidents. But in nineteen ninety seven,
Speaker 1: the then president of South Korea, Kim yung Sam, this
Speaker 1: was the next successor, granted, couldn't he a pardon? So
Speaker 1: kunn He gets a presidential pardon in nineteen ninety seven
Speaker 1: after being accused of bribing the two previous presidents. By
Speaker 1: the way, at this point, Korea had entered into what
Speaker 1: is called the sixth Republic, which is what it currently
Speaker 1: is in Koreas. In the sixth Republic, the third and
Speaker 1: fourth Republic were Arc Chunghi's presidential administrations. I guess you
Speaker 1: could call it. And then you had the fifth one
Speaker 1: with du Huan and Taiwu. All right, So, Kim Yong
Speaker 1: Sam also pursued charges of corruption and treason against his predecessors,
Speaker 1: du Huan and Taiwu. So the president who granted the
Speaker 1: pardon to Samsung's Kunhi, President of South Korea, also went
Speaker 1: after the two previous presidents of South Korea, but then eventually,
Speaker 1: after having them both convicted, would grant them both a pardon.
Speaker 1: So Samsung's politics are confusing, but so are Koreas, right,
Speaker 1: because you had a current standing president accuse and convict
Speaker 1: two former presidents of corruption charges and then grant them pardons.
Speaker 1: Complicated stuff, all right. So Samsung's Kunhi gets his pardon
Speaker 1: in nineteen ninety seven for those bribers recharges. Then he
Speaker 1: goes back to managing Samsung. He has a son, and
Speaker 1: he had three daughters, all of whom attended school in
Speaker 1: the United States. His son, Lee ja Yong also known
Speaker 1: in the West as j y Lee, assumed control of
Speaker 1: fourteen internet venture companies, but they went out of business
Speaker 1: within a year. So that didn't exactly instill a lot
Speaker 1: of enthusiasm because again, the way Samsung operates, the way
Speaker 1: Korea businesses operate, especially in this old family tradition, Jay
Speaker 1: Lee stands to inherit Samsung. His father Kunhee is the
Speaker 1: current leader and would traditionally pass it down to his
Speaker 1: eldest son. Well, Jay Lee is the only son of Kunhi.
Speaker 1: Kunhi's daughter, Lee Yung Jung, is the subject of a
Speaker 1: really tragic story, and he may have heard about this
Speaker 1: because it was big news when it happened. When she
Speaker 1: was twenty six years old, the heiress to the Samsung
Speaker 1: fortune hanged herself in a New York apartment building. Her
Speaker 1: death was international news. She was the daughter of one
Speaker 1: of Korea's wealthiest men, and in Korea, her death was
Speaker 1: originally reported as the result of a car accident. She
Speaker 1: had an avid interest in race cars, and people knew
Speaker 1: that about her, but according to some people close to her,
Speaker 1: she was also prone to bouts of loneliness and depression,
Speaker 1: possibly because she had hoped to marry a man she
Speaker 1: had fallen in love with back in Korea, but she
Speaker 1: had been told by her parents that the man was
Speaker 1: not of the right stature for her to marry, and
Speaker 1: they forbade her from marrying him. Now, the true story
Speaker 1: that led to her suicide is probably not fully known,
Speaker 1: and I'm sure is far more complicated than that simple answer,
Speaker 1: but it was a shocking and tragic that made world headlines.
Speaker 1: In two thousand and eight, Lee kunhe was accused of
Speaker 1: and convicted for tax evasions. So ten years after, a
Speaker 1: little bit more than ten years after his last conviction,
Speaker 1: he gets accused and convicted for another set of crimes.
Speaker 1: The charges said he failed to pay forty five million
Speaker 1: dollars in taxes and he was hit with a fine
Speaker 1: that was nearly ninety million dollars. As a result of
Speaker 1: the scandal, he was forced to resign as chairman of Samsung.
Speaker 1: That put his son, Jay Lee's claim in danger, actually
Speaker 1: because since he had to step down, there was the
Speaker 1: question of whether or not he would be able to
Speaker 1: pass along the ownership of the company to his son.
Speaker 1: But then in two thousand and nine he received another
Speaker 1: presidential pardon for giving him for his conviction of tax evasion,
Speaker 1: and in twenty ten he reassumed leadership of Samsung Electronics.
Speaker 1: All right, let's get back to CJ Group, which again
Speaker 1: spun off from Samsung in the early nineteen nineties. This
Speaker 1: was the part of the company that dealt with food
Speaker 1: and biopharmaceuticals and later got into the entertainment business, forming
Speaker 1: subsidiaries like CJ Media's CJ Entertainment and CJ Internet. Lee
Speaker 1: mong He, remember he was the eldest son of the
Speaker 1: founder of Samsung. He had a son, Lee jay Hun,
Speaker 1: you remember I mentioned him earlier, who became the head
Speaker 1: of CJ Group in two thousand and two. So this
Speaker 1: is a Samsung founder's grandson. Lee jay Hun would be
Speaker 1: grandson to Byung Choll, the founder of Samsung. Anyway, in
Speaker 1: twenty thirteen, Lee jay Hun was arrested on charges of
Speaker 1: tax evasion and embezzlement, so you might be sen sing
Speaker 1: a theme here. He would also eventually receive a pardon
Speaker 1: from the president in twenty sixteen. As for mong He,
Speaker 1: the eldest son, he passed away in twenty fifteen, the
Speaker 1: second of Biongchull's children to pass on. Now, of course,
Speaker 1: this is not where the story ends. You have probably
Speaker 1: heard about a scandal that is sweeping South Korea that
Speaker 1: hit worldwide news in twenty sixteen. It is often referred
Speaker 1: to as the Choice Sunsil scandal. Samsung is caught up
Speaker 1: in that as well as lots of other companies and entities.
Speaker 1: So what is the scandal all about? Oh boy, I
Speaker 1: hope you still got some popcorn. Here we go well,
Speaker 1: as you've no doubt gathered from this and the previous podcast.
Speaker 1: Korea's government has had a real rocky time since World
Speaker 1: War Two and even before that, with several leaders doing
Speaker 1: their best to maintain a position of power beyond what
Speaker 1: we're supposed to be legally binding protections for the Korean people.
Speaker 1: Many Korean leaders have been involved in various scandals that
Speaker 1: revolve around bribery and corruption, and honestly, I think it's
Speaker 1: impossible to really lay blame here because the nation of
Speaker 1: Korea has been the subject of so much interference in
Speaker 1: international intrigue, but this particular scandal really stands out. Choi
Speaker 1: Sunsil is the name of a woman. She was the
Speaker 1: daughter of a man named Choi Thai Minh. Thai Minh
Speaker 1: was the head of a sect of South Korean Christians.
Speaker 1: He was formerly a Buddhist and converted to Roman Catholicism,
Speaker 1: and some people call his group a cult. I do
Speaker 1: not know enough about it to give it a term,
Speaker 1: but he'd certainly led a sect of religious followers in
Speaker 1: South Korea. He became friends with and a mentor to
Speaker 1: a woman named Park Gun Hey, and I know I'm
Speaker 1: butchering her name but she was the daughter of Park Chunghi,
Speaker 1: the military general who became the dictator of South Korea
Speaker 1: for many years for the Third and Fourth Republics of Korea.
Speaker 1: Now Park Gun He was elected to the position of
Speaker 1: president in twenty thirteen, and she was friends with Choice
Speaker 1: Sun Sil not time. Men had passed away in the nineties,
Speaker 1: but his daughter Sun Sil remained very close to Gunhi.
Speaker 1: In twenty sixteen, it became public knowledge that there were
Speaker 1: a string of accusations and arrests that were flooding the
Speaker 1: South Korean government, many of them targeting the people around
Speaker 1: the president herself, and the story unfolded that Sun Sil
Speaker 1: had been using her considerable influence over the president to
Speaker 1: create favorable deals for herself and her family and her friends,
Speaker 1: and that many government officials have been accepting numerous large
Speaker 1: bribes from lots of businesses, including businesses related to Samsung.
Speaker 1: This scandal has rocked South Korea. The president has stepped down,
Speaker 1: she was impeached. She stepped down from the role of president.
Speaker 1: The Prime minister took over. But as for Samsung, this
Speaker 1: led authorities to go investigate Jay Lee, whom I hope
Speaker 1: you'll remember, is Kunhe's son and therefore a grandson of
Speaker 1: the founder Jung Chol So. Jay Lee was serving as
Speaker 1: vice chairman for Samsung Electronics. He's essentially the heir apparent
Speaker 1: to Samsung. He was accused of bribery, among other things,
Speaker 1: and was arrested in January twenty seventeen. The accusations include
Speaker 1: one that says that he made sizable contributions to the
Speaker 1: tune of about thirty five million dollars to two nonprofits
Speaker 1: that Choi Sunsil allegedly controls Now the story is still
Speaker 1: unfolding at this time of the recording, and so the
Speaker 1: future of Samsung leadership remains an open question. It could
Speaker 1: turn out that it has merit and that Jay Lee
Speaker 1: will be convicted of these charges. It could turn out
Speaker 1: that we see yet another presidential pardon come out and
Speaker 1: absolve him of these charges. Who knows. One possible successor
Speaker 1: to the Samsung empire could be Kun He's daughter, Li
Speaker 1: Bu Jing. She is sometimes referred to as Little Kunhi
Speaker 1: by the Korean public. She's the president of Hotel Shila
Speaker 1: and co president of Samsung Everland, which is a company
Speaker 1: that oversees Korea's oldest amusement Park under the umbrella of
Speaker 1: Child Industries. Now, if you listen to part one of
Speaker 1: the Samsung story, you might remember I mentioned Child Industries
Speaker 1: in that episode. It started off as a very humble business.
Speaker 1: It was a woolen mill back when Samsung first was
Speaker 1: diversifying in the mid twentieth century. Well, Li Bujin's sister,
Speaker 1: Li SiO Hyun is the other co president of Child Industries,
Speaker 1: so the two sisters sit at the top of that company.
Speaker 1: There was also a recent story where in an effort
Speaker 1: to streamline things, there was a plan to have Child
Speaker 1: Industries acquire Samsung C and T. So that's not the
Speaker 1: overall Samsung company, it's the construction and transportation company that
Speaker 1: was part of Samsung. But Paul Singer, who is an
Speaker 1: investor with more than seven percent ownership of stock and
Speaker 1: Samsung C and T, blocked that plan. He led a
Speaker 1: charge to block it, saying that he felt that the
Speaker 1: nine point four billion dollar stock offer was undervaluing Samsung
Speaker 1: CNT and that shareholders wouldn't be paid a fair amount
Speaker 1: for their ownership. That caused some headaches over on the
Speaker 1: Samsung side. For the leadership for the Lee family, I
Speaker 1: suppose I should say shareholders have pressured Samsung, trying to
Speaker 1: get them to change to a more traditional holding structure,
Speaker 1: you know, like with a board of directors and that
Speaker 1: sort of thing. Many other chabels in Korea have given
Speaker 1: up the ghosts, they have disappeared, They got broken up
Speaker 1: by the government and dispersed and turned into more traditional
Speaker 1: Western style corporations. But Samsung's Lee family has not followed suit,
Speaker 1: and they have been putting up resistance to this and
Speaker 1: have said that it's completely unnecessary and in fact would
Speaker 1: end up more harm than good. That's their claim. So
Speaker 1: you could say they are disinclined to acquiesce to such pressures. Well,
Speaker 1: that concludes the Samsung story at least as far as
Speaker 1: twenty seventeen. I need to check and see if I've
Speaker 1: done an update since then. I don't remember doing it.
Speaker 1: But then I publish a lot of episodes, y'all. I
Speaker 1: cannot remember what I published two weeks ago, let alone
Speaker 1: you know, three or four years ago. But I think
Speaker 1: it may very well be time to do an update
Speaker 1: to that if I have not already, So I'll have
Speaker 1: to search the archives and see and if I haven't
Speaker 1: done an update, that has gone on the list. I
Speaker 1: hope you enjoyed this classic episode, and I'll talk to
Speaker 1: you again really soon. Tech Stuff is an iHeartRadio production.
Speaker 1: For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts,
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