Speaker 1: Get in text with technology with tex Stuff from dot com.
Speaker 1: Hey there, and welcome to tex Stuff. I'm your host,
Speaker 1: Jonathan Strickland, senior writer for house stuff Works dot com.
Speaker 1: And today we're going to pick up where we left
Speaker 1: off in our last episode about the history of Samsung.
Speaker 1: So if you have not listened to the previous episode,
Speaker 1: you should probably go back and do that because I
Speaker 1: cover a lot of basic ground in that show. That
Speaker 1: includes an overview of the conditions in Korea leading up
Speaker 1: to the founding of Samsung up to the stage where
Speaker 1: the company finally got into the electronics industry. Because Samsung,
Speaker 1: as it turns out, is a conglomeration of companies that
Speaker 1: do lots of different things. Electronics is just part of it.
Speaker 1: It's one of the more forward facing components, especially outside
Speaker 1: of Korea, 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 gonna talk
Speaker 1: a lot about the family who who is 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 then the last episode, I told you that
Speaker 1: Korea had come under the rule of a military leader,
Speaker 1: a general named Bak Jong he or also sometimes spelled
Speaker 1: Park Chung he Uh. These names are Anglicized versions of
Speaker 1: the Korean names, so often it's as close to an
Speaker 1: approximation of an anglicized pronunciation as we can get. So
Speaker 1: there are different spellings uh. Park chung y is probably
Speaker 1: the most common, but I've also seen Bak Jong key
Speaker 1: same person. However, In fact, this is a good time
Speaker 1: for me to mention this. In the previous episode, I
Speaker 1: talked about a US backed leader, and I talked about
Speaker 1: him a lot. I said Li sungman Um and also
Speaker 1: mentioned a man named Sing man Ri. Both of those
Speaker 1: names are actually the same person. Uh. See, in the
Speaker 1: western world, we will say a person's uh 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 sing Manrie is the way that we
Speaker 1: often see. It's spelled um, depending upon the source you're
Speaker 1: looking at. So I know it gets a little confusing,
Speaker 1: but these are the same people. They're just anglicized versions
Speaker 1: of the name. Anyway, let's go back to Park Chung He,
Speaker 1: the general, the person who had been in charge of
Speaker 1: South Korea in nineteen seventy two. He put the country
Speaker 1: under martial law and solidified his power in South Korea,
Speaker 1: they would hold elections and Park Chung He would win
Speaker 1: those elections. But there were a lot of people who
Speaker 1: essentially said that Park Chung he was really just a
Speaker 1: military dictator. Just a military dictator is probably the wrong
Speaker 1: way of saying it, but he was a military dictator
Speaker 1: as opposed to a legally elected president according to whom
Speaker 1: you ask. Meanwhile, at the same time, South Korea government
Speaker 1: officials were starting up talks with their counterparts in North
Speaker 1: Korea and the two countries talked about wanting to reunite,
Speaker 1: to have a reunification of Korea. They said that there
Speaker 1: were a lot of requirements for that. One of the
Speaker 1: big ones was that they demand did no outside interference.
Speaker 1: They didn't want other entities coming into Korea to try
Speaker 1: and guide the process. Remember, Korea had been the subject
Speaker 1: of a lot of interference from the Soviet Union, from
Speaker 1: the United States of America before that, Japan, and China,
Speaker 1: so they were really determined to do this themselves. But
Speaker 1: spoiler alert, that never really happened. In nineteen seventy nine,
Speaker 1: the head of the Korean Intelligence Service, Kim jgu, assassinated
Speaker 1: Park Chung he So, the head of the Korean version
Speaker 1: of the c i A, 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 dou Pan sees power in nineteen eighty and thus
Speaker 1: returned the country to a dictatorship with token elections, and
Speaker 1: that would continue to be the case until the late
Speaker 1: nineteen eighties. So Korea still had a tumultuous and often
Speaker 1: violent uh 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 Chung he was a dictator,
Speaker 1: he was largely seen as someone who worked very hard
Speaker 1: to improve conditions in Korea, So it wasn't just exploiting
Speaker 1: his power, 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: established 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 towards Samsung becoming a global player
Speaker 1: in consumer electronics. Before that, they had really been selling
Speaker 1: mainly to to South Korea, but now they were expanding
Speaker 1: beyond that, and they were determined to really continue this
Speaker 1: level of success with all different types of electronics. Around
Speaker 1: the same time, Samsung began to produce other products in
Speaker 1: consumer electronics, including air conditioners, which I have covered in
Speaker 1: previous episodes of tech Stuff and the microwave, And there
Speaker 1: is also a classic episode of tech Stuff about how
Speaker 1: the microwave works. So I'm not going to go into
Speaker 1: a full explanation, but because this episode is going to
Speaker 1: be a lot about corporate politics and actual politics because
Speaker 1: of the complicated uh nature of Korean business, I thought
Speaker 1: why not go ahead and have at least a brief
Speaker 1: explanation on the science slash technology side of microwaves to
Speaker 1: really have this podcast earned the name of tech stuff,
Speaker 1: because otherwise we're just gonna be talking about lots of economics, politics,
Speaker 1: and and and very complicated issue. So I'm gonna give
Speaker 1: you some highlights of how microwave ovens work. So the
Speaker 1: radiation microwaves UM microwaves are in the electromagnetic spectrum in
Speaker 1: between infrared and radio waves, so they are longer waves
Speaker 1: than visible light. Microwave ovens produced microwaves that are frequency
Speaker 1: of two point four or five giga hurts. That's two
Speaker 1: point four or five billion wave lengths passing through a
Speaker 1: given point within a second. Now, certain stuff like fats, sugars,
Speaker 1: and water absorb waves that are at this two point
Speaker 1: four or five giga hurts frequency. As they absorb those waves,
Speaker 1: their atoms begin to get excited. That means they start
Speaker 1: to move around, and we call this heat. Right, If
Speaker 1: atoms are moving around a lot, they they are warm,
Speaker 1: they're giving off heat, and they're giving off that form
Speaker 1: of energy. Likewise, if you apply heat to materials, you
Speaker 1: start to make their atoms move around more rapidly. So
Speaker 1: stuff like glass, ceramics, and plastics do not absorb waves
Speaker 1: at that frequency. So if you were to put a
Speaker 1: glass like a glass uh container in a microwave and
Speaker 1: you turned it on, and then you took the glass
Speaker 1: container out, assuming there was nothing on it to heat
Speaker 1: up to absorb those microwaves, it should not be really
Speaker 1: any significantly warmer to the touch. So that's why the
Speaker 1: food and a microwave will heat up, but the containers
Speaker 1: do not. Metal, by the way, reflects microwaves, which is
Speaker 1: why the interior of most microwave ovens tends to be metallic.
Speaker 1: It's to reflect waves back into the oven in order
Speaker 1: to give the food a better chance at absorbing the
Speaker 1: waves and heating up and cooking in the process. This
Speaker 1: is also why we say that this this kind of
Speaker 1: food cooks from the inside out, uh And you're not
Speaker 1: applying any heat to a surface, so you don't get
Speaker 1: that seared nature you would get if you were to say,
Speaker 1: cook in a pan. One other thing, microwaves are not
Speaker 1: a form of ionizing radiation. That means that the waves
Speaker 1: don't carry enough energy to ionize atoms or molecules, or
Speaker 1: to simplify it even further, it means microwaves don't pack
Speaker 1: enough of a punch to strip electrons away from atoms.
Speaker 1: Ionizing radiation includes stuff like ultra violet radiation, X rays,
Speaker 1: and gamma rays, and they do have enough energy to
Speaker 1: strip away electrons, and if you are exposed to that
Speaker 1: sort of radiation, you can suffer immediate and long term
Speaker 1: damage as a result. So in a short term, very
Speaker 1: brief exposure, you might suffer burns. In the case of
Speaker 1: ultra violet radiation, it may take a little bit longer
Speaker 1: for you to actually suffer burns, but you know that's
Speaker 1: what sunburn is. In the long run, you're talking about
Speaker 1: bigger risks like cancer, so you want to really minimize
Speaker 1: your exposure to ionizing radiation. But happily microwaves are not
Speaker 1: in that category, nor are radio waves. It's the stuff
Speaker 1: and those those uh, bigger wavelengths, they don't have the
Speaker 1: energy to do that, which is why you shouldn't have
Speaker 1: to worry about microwaves or radio waves or anything like
Speaker 1: that causing you any harm. They just don't have the
Speaker 1: energy to do that to you. Whereas X rays, gamma rays,
Speaker 1: that kind of stuff certainly has that sort of energy. Now,
Speaker 1: if you want to learn more about how microwaves work,
Speaker 1: including how they actually generate the microwave radiation in the
Speaker 1: first place. Make sure you check out that classic Tech
Speaker 1: Stuff episode. It is titled how Microwave Ovens Work. Yeah,
Speaker 1: we thought long and hard about that title. Anyway, that
Speaker 1: episode came out way back on March one. Let's get
Speaker 1: back to Samsung. In nineteen eighty, Samsung made another big acquisition.
Speaker 1: Remember that's how this company was really growing. It was
Speaker 1: buying up other companies and getting involved in as many
Speaker 1: different industries as possible. This time it was a telecommunications
Speaker 1: hardware company, Hangook Jinja tongs In. The number one product
Speaker 1: the company made was telephone switchboards, so they were starting
Speaker 1: to install more telephone infrastructure in Korea. Samsung soon expanded
Speaker 1: this to produce telephone and faxt systems, and much later
Speaker 1: on mobile phones. More on Samsung's mobile phones. A bit later,
Speaker 1: Samsung expanded the operations of its electronics division into other nations,
Speaker 1: including the United Kingdom in the US, and the company
Speaker 1: had become an empire. And that's when it lost its emperor.
Speaker 1: It was and Lie Byong Chol, who was the man
Speaker 1: who founded Samsung when he was just twenty eight years old,
Speaker 1: passed away. Now, if you listen to our last episode.
Speaker 1: You know, he had come from a wealthy family to
Speaker 1: begin with, but his company had elevated him and his
Speaker 1: family to truly wealthy status billionaires. Now at the time
Speaker 1: of his death, he had one of the large just
Speaker 1: private collections of Korean art in all of the nation,
Speaker 1: which was opened up to the public after his passing.
Speaker 1: He had ten children, six daughters and four sons. There
Speaker 1: were also rumors of him having other children with other
Speaker 1: women besides his wife in Korea, but that was a rumor.
Speaker 1: That the family is very secretive in the first place,
Speaker 1: 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, a 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 uh and that has
Speaker 1: caused some constern nation. As it turns out, now the
Speaker 1: company split into four are major business groups that eventually
Speaker 1: became their own individual companies, and at least according to
Speaker 1: the people running those companies, have nothing to do directly
Speaker 1: with one another anymore. Those include the Shinsega Group or
Speaker 1: sinse I Guess Group, i should say, which is mostly
Speaker 1: concerned with retail businesses, you know, department stores, that kind
Speaker 1: of thing. There's the c J Group, which includes businesses
Speaker 1: in food, chemical, entertainment industries. There's the Hensaul Group, which
Speaker 1: includes telecommunications and paper manufacturing industries. And then you have
Speaker 1: the Samsung Group, which is pretty much everything else. So
Speaker 1: for right now, the only important thing you need to
Speaker 1: remember is that Lieb Young Chu, the founder of Samsung,
Speaker 1: died in and I'll try to focus exclusively on Samsung
Speaker 1: Electronics from here on out, though I should mention the
Speaker 1: company as a whole consisted of eighties smaller companies at
Speaker 1: one point or another or eighty. It was a really
Speaker 1: a conglomerate in the true sense of the word. It
Speaker 1: was a company filled with other companies. Many, in fact,
Speaker 1: most of those companies had nothing to do with consumer electronics.
Speaker 1: In the late eighties and early nineties, Samsung Electronics began
Speaker 1: opening manufacturing facilities in different parts of the world. The
Speaker 1: company was really making a name for itself, becoming a
Speaker 1: global player in the electronics space. This is pretty remarkable
Speaker 1: when you remember that companies like Sony had been in
Speaker 1: the electronics industry for decades, whereas Samsung really only began
Speaker 1: to dive into it in nineteen sixty nine nineteen seventy,
Speaker 1: so they had a lot of catching up to do.
Speaker 1: Samsung continued to expand the types of electronics it produced
Speaker 1: in the nineteen eighties, like I said, with air conditioners
Speaker 1: and microwaves starting off, but by nine eight three the
Speaker 1: company also began to get into the personal computer business.
Speaker 1: The very first Samsung computer was the SPC one thousand,
Speaker 1: which came out in March nine three, and it was
Speaker 1: an eight bit personal computer which looked more like a
Speaker 1: giant electronic typewriter. It had sixty four whole kilobytes of
Speaker 1: RAM and about four mega hurts 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 DOSS operating system good times. In four Samsung
Speaker 1: began to export VCRs to the United States. And I've
Speaker 1: covered VCRs in the past, including a deep dive on
Speaker 1: the format wars between VHS and Beta Max, 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 a ninety eight six, Samsung created what
Speaker 1: was then the smallest videotape recorder, four millimeter video tape 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: though it would continue to work on the software side
Speaker 1: and the systems side for another year. By two, Samsung
Speaker 1: had become the global leader in producing memory chips for
Speaker 1: electronics so essentially RAM and it fell only behind Intel
Speaker 1: for chip making in general, so Intel was the number
Speaker 1: one producer of computer chips in and Samsung was number two, again,
Speaker 1: a remarkable story for a company that had only recently
Speaker 1: started to get into electronics at all. Samsung pioneered work
Speaker 1: and building l c D displays in the mid nineties,
Speaker 1: and if you listen to my History of TV series,
Speaker 1: you know that the l c D panels really helped
Speaker 1: push televisions into a new era, allowing for a thinner
Speaker 1: form factor and flat screen TVs. Samsung Electronics would end
Speaker 1: up making millions of dollars by licensing l c D
Speaker 1: panel technology to other companies that became a chief source
Speaker 1: of revenue for the for the Samsung Electronics division. Also
Speaker 1: in Samsung began manufacturing in China and producing computer components
Speaker 1: such as RAM and hard disk drives, with a two
Speaker 1: fifty megabyte drive released that year, which again sounds like
Speaker 1: nothing at all two and fifty megabytes. I mean, you
Speaker 1: can get multi gigs on a single flash drive these days,
Speaker 1: but back then it was pretty impressive. Samsung was also
Speaker 1: producing industrial robots at this time and managed to hit
Speaker 1: the ten million products ship by the end of nine
Speaker 1: and by products, i'm talking specifically robots. They produced ten
Speaker 1: million industrial robots by the end of nineteen two. That's
Speaker 1: pretty incredible. Now I've got a lot more to talk
Speaker 1: about with Samsung's electronics, but before I dive into the
Speaker 1: next section, let's take a quick break to thank our sponsor.
Speaker 1: In nineteen ninety three, Samsung's Advanced Institute of Technology, also
Speaker 1: known as s a I T or SAITE, developed the
Speaker 1: first digital versatile disc recorder or DVD R device. I
Speaker 1: guess I mean it couldn't have been the DVD we
Speaker 1: all know because that didn't exist in nine That wouldn't
Speaker 1: be introduced until as a joint project between Sony and Panasonic. Honestly,
Speaker 1: I'm not really sure how Samsung's device fits into the
Speaker 1: history of DVDs and dvd rs. In particular, I found
Speaker 1: the entry that the company first produced this first DVD
Speaker 1: R on Samsung's actual website, so this is according to
Speaker 1: the company itself. But that really strikes me as strange
Speaker 1: because as far as I know, the standard didn't really
Speaker 1: exist until So how do you produce a product two
Speaker 1: years before you've figured out the standard. It's possible that
Speaker 1: the entry is erroneous, but it did come from Samsung itself,
Speaker 1: so I thought it would include it. So you know
Speaker 1: grain of salt. It may very well be that they
Speaker 1: produced a DVD R on an early version of what
Speaker 1: would become the standard in but it just seems a
Speaker 1: bit early to me. Totally possible, just something that I
Speaker 1: did not hear about when I was researching DVDs years ago.
Speaker 1: In the mid nineties, Samsung products began to number on
Speaker 1: the top sellers for certain categories like l C D screens.
Speaker 1: Samsung was definitely leading the way there. Meanwhile, Lee Kun he,
Speaker 1: who was a son of Lee Byung Choll. Remember I
Speaker 1: said Leeb young Chol had ten children. Well, Lee kun
Speaker 1: he was the third son. He would join the International
Speaker 1: Olympic Committee in the mid nineties, and that move is
Speaker 1: really important to note because it illustrates how critical a
Speaker 1: 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 towards
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 Samsung launched the Samsung Entertainment Group that same year
Speaker 1: site you know s A I T showed off a
Speaker 1: real time MPEG three technology. And then there was a
Speaker 1: story from that same year or around I guess that
Speaker 1: Lee Kun He, who again was the head of sam
Speaker 1: Sung Electronics at that time and in fact still is today,
Speaker 1: ordered an entire inventory of smartphones destroyed because they apparently
Speaker 1: did not work properly. So the story was that an
Speaker 1: early smartphone really an internet connected phone, It wasn't a
Speaker 1: smartphone the way we would imagine today, didn't work properly
Speaker 1: as it came out of production, and so rather than
Speaker 1: trying to fix the inventory league when 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 two thousand and sixteen notwithstanding, and
Speaker 1: in n 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 nine, South Korea, along with
Speaker 1: countries like Indonesia, tile and and the Philippines, were all
Speaker 1: caught in a terrible financial crisis. It began in Thailand
Speaker 1: with the collapse of Thailand's national currency, and that created
Speaker 1: a sort of ripple effect, and South Korea was caught
Speaker 1: in it. In fact, you could argue caught some of
Speaker 1: the worst of it, with national debts surging as a result.
Speaker 1: Samsung was affected by this problem just like other companies were,
Speaker 1: although Samsung was in good position to be able to
Speaker 1: weather the storm better than a lot of its competitors.
Speaker 1: According to the company's website, Samsung reduced the number of
Speaker 1: affiliated companies to forty five, which is still an enormous
Speaker 1: number of affiliates, right, I mean, that's a big conglomerate,
Speaker 1: and keep in mind this is family owned businesses. The
Speaker 1: company ended up laying off about fifty thousand employees and
Speaker 1: sold ten business units. And one of the businesses Samsung
Speaker 1: sold off was its motor vehicle business or it used
Speaker 1: to be Samsung Motors, but the company sold off its
Speaker 1: interest to Reno at a big loss. Renault uh Samsung
Speaker 1: is mostly owned by Renault like ownership, and less than
Speaker 1: that ownership falls to Samsung. In the late ninety nineties,
Speaker 1: Samsung began to produce larger l C D screens and
Speaker 1: they ushered in a new era of large flat screen
Speaker 1: televisions and monitors, and they also started mass producing digital televisions.
Speaker 1: The semiconductor branch of the company was busy creating RAM
Speaker 1: and flash based chips, and in Samsung launched a smartphone.
Speaker 1: This would be a true Internet capable mobile phone handset.
Speaker 1: But keep in mind again, 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: at the turn of the millennium, you know, around two thousand,
Speaker 1: Samsung got into the h d TV game. High definition
Speaker 1: television was still pretty young. I mean, it been pioneered
Speaker 1: in the nineties, but two thousand was when consumers were
Speaker 1: starting to really look at HDTV for the first time
Speaker 1: in a serious way, and Samsung was able to secure
Speaker 1: a 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, you know, much shorter
Speaker 1: history in the consumer electronics field. Through sheer willpower and
Speaker 1: lots of investments. They were able to do this. By
Speaker 1: two thousand one, the company's subsidiary, Samsung Techwin, would become
Speaker 1: the supplier for engine parts for the Airbus A three
Speaker 1: eighty and for the Boeing seven seven, so they also
Speaker 1: were doing a lot of business to business deals. In
Speaker 1: two thousand five, Samsung became the largest producer of l
Speaker 1: c D P anneals globally. The following year, two thousand six,
Speaker 1: Samsung and Sony formed a deal in which Samsung would
Speaker 1: supply Sony with l c D panels, and this partnership
Speaker 1: was almost fifty almost sam Sung owned one share more
Speaker 1: than Sony did, and in two thousand eleven, Samsung would
Speaker 1: buy out Sony's steak in this partnership and take over
Speaker 1: the business completely. As for the mobile phones, Samsung really
Speaker 1: joined the fray in when it launched the Galaxy S
Speaker 1: that was its first flagship Android phone. Since that time,
Speaker 1: Samsung and Apple would engage in numerous court battles around
Speaker 1: the world over various patents and designs, with each side
Speaker 1: accusing the other of copying the first one. So Apple
Speaker 1: would say Samsung copied us. In this way, Samsung would
Speaker 1: say Apple copied us, and this way, and these got
Speaker 1: really complicated and enormous. We went into some detail of
Speaker 1: the story in an episode called the Patent Wars, which
Speaker 1: came out in two thousand eleven, but obviously those have
Speaker 1: continued since then. Samsung also manufactured the first popular consumer
Speaker 1: tablet running on Android in two ten. That was the
Speaker 1: Galaxy Tab, and it began to experiment with smart televisions.
Speaker 1: Those are TVs that pull in content directly from the Internet.
Speaker 1: You probably are familiar with the many of the of
Speaker 1: you may have a smart TV. I your humble host.
Speaker 1: I'm still falling behind the times as my TV is
Speaker 1: not smart, but I got a lot of smart stuff
Speaker 1: connected to it anyway. In Samsung actually overtook Nokia or
Speaker 1: Nokia if you prefer. It's definitely not Nokia as the
Speaker 1: number one production company for mobile phones. So this is
Speaker 1: a big deal for Samsung to overtake the giant Nokia
Speaker 1: in the company is a true powerhouse in Korea. It
Speaker 1: accounts for it almost fifteen percent of the gross domestic
Speaker 1: product in Korea back in and in case you're rusty.
Speaker 1: Under 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 fent of
Speaker 1: all of Korea's GDP in twelve That is enormous. There's
Speaker 1: no company in the United States that comes close to that,
Speaker 1: and the overall company has an employee base of nearly
Speaker 1: half a million people. Huge, huge, huge company. Now they
Speaker 1: now focus on just a few core businesses, which include
Speaker 1: mobile technology, electronics, and biopharmaceuticals, among a couple of others.
Speaker 1: It really is big. It is the third largest company
Speaker 1: in the world by revenue, and it holds more US
Speaker 1: patents than any other company. It's also involved in emerging markets,
Speaker 1: including stuff like virtual reality and wearables. Oh and there's
Speaker 1: some notable stories about some of the Samsung products that
Speaker 1: are out there. You know, some things that suffered a
Speaker 1: couple of issues. Let's talk about the one that I
Speaker 1: bet you already know I'm referring to. It is, in fact,
Speaker 1: the Samsung Galaxy Note seven. This phone became infamous after
Speaker 1: more than one hundred of the handsets were reported to
Speaker 1: have burst into flames. So what happened, Well, the phones
Speaker 1: have lithium ion batteries, and lithium ion batteries are flammable.
Speaker 1: That's why you're not supposed to put any in your
Speaker 1: luggage that you're gonna store unless you're gonna check. You know,
Speaker 1: when you go to an airport, you don't check bags
Speaker 1: have lithium ion batteries in them because of the potential
Speaker 1: danger for fire. So what can happen is a short
Speaker 1: circuit can create this this dangerous situation, and a short
Speaker 1: circuit is kind of what it sounds like. It's when
Speaker 1: you create a shortcut in a circuit, an elect rons
Speaker 1: can flow that can follow the shortcut rather than the
Speaker 1: path you want them to follow. So the basics of
Speaker 1: electronics is this, we harness electrons to do what we
Speaker 1: want them to do, and we do it through making
Speaker 1: all these different pathways and gates. And as long as
Speaker 1: we've got that working, the electrons can only follow the
Speaker 1: gates and go through the gates that are that we
Speaker 1: allow them to go through, and they don't go through
Speaker 1: the ones we don't allow them to go through. Our
Speaker 1: electronics work. But if we create a shortcut so that
Speaker 1: electrons can jump from one pathway to another directly, then
Speaker 1: we have a problem. Electrons will take that path of
Speaker 1: least resistance, no pun intended, and as a result, it
Speaker 1: starts to heat things up. You've got this extra energy
Speaker 1: being given off the form of heat. So with batteries,
Speaker 1: if there's a puncture between the positive and negative electrodes,
Speaker 1: you can have a direct change of electrons and the
Speaker 1: material will start to heat up. Well, Lithium ion batteries
Speaker 1: are really flammable, so if they heat up and off,
Speaker 1: they'll burst into flames. Originally, Samsung tried to address this
Speaker 1: problem by replacing 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 forced 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, earlier 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 adorable.
Speaker 1: And it also the new phone has an Irish scanner
Speaker 1: so that you can use that for authentication. You can
Speaker 1: 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. Uh. I
Speaker 1: should 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 gonna talk a lot about
Speaker 1: some of the controversies behind Samsung, I don't want that
Speaker 1: to come across as me slagging the company as a whole.
Speaker 1: I think that there are a lot of really good
Speaker 1: Amsung products out there, but it is really fascinating to
Speaker 1: take a look at the family behind the company and
Speaker 1: their relationships with one another. Because you know this is
Speaker 1: some Game of Thrones stuff, and I'm not kidding. You
Speaker 1: should probably grab some popcorn, and I'm going to take
Speaker 1: a quick break to thank our sponsor. Let's get back
Speaker 1: to Lee Byong Chul'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 tail. 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 Kudata where Park Park Chunky,
Speaker 1: the military general, took control of the of the Korean government.
Speaker 1: Um this was partially because Lieb Young chol had developed
Speaker 1: a beneficial relationship with the former leadership of South Korea.
Speaker 1: You know that US backed president that was in charge
Speaker 1: of South Korea before the Kudata. Well, Young Chul 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 meant for preferential treatment. So because
Speaker 1: there was a kutata where one regime was replacing another,
Speaker 1: that put Bong 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 Chung he gave Samsung
Speaker 1: some preferential treatment that really is beyond question, and also
Speaker 1: a 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 and bring in Korea
Speaker 1: up to speed with the rest of the industrialized world
Speaker 1: in a very short span of time. So again I'm
Speaker 1: not trying to demonize Liebyung chual, but I'm also not
Speaker 1: shying away from the fact that this is complicated. Now
Speaker 1: ninety seven, Leebyung Chol had to officially resign as chairman
Speaker 1: of Samsung. This was due to a charge that his
Speaker 1: second son Lee chang He, had been smuggling saccharin into Korea.
Speaker 1: So this scandal breaks out, Lee Byung Chul, as part
Speaker 1: of this news break of his second son being part
Speaker 1: of a smuggling operation, announces that he will step down
Speaker 1: as the head of Samsung Group and thus control of
Speaker 1: the company passed, as his tradition in South Korea to
Speaker 1: the eldest son that was Lie Mang Kee. Now keep
Speaker 1: in mind, Samsung Group is a company of companies, and
Speaker 1: we're talking around a companies at this point. But founder
Speaker 1: lead Byong Chol still had the power to choose which
Speaker 1: of his children would officially lead the company after his death,
Speaker 1: which is common in Korea. Leadership can remain within a family,
Speaker 1: and Biong Chol watched as his eldest song son mong
Speaker 1: He began to alienate the leadership of the various divisions
Speaker 1: within Samsung, and in fact, according to some reports, he
Speaker 1: had even written that within six months he had plunged
Speaker 1: that upper echelon of executive leadership into chaos. There were
Speaker 1: a lot of reports that Mong He was short tempered
Speaker 1: and ill suited for leadership. Meanwhile, Biong Chol's second son,
Speaker 1: Chong He, tried to position himself into a power position
Speaker 1: despite his previous scandal of smuggling Sacharin by talking to
Speaker 1: the President of South Korea and revealing that Biong Chol
Speaker 1: had 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 Young Chal 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 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 when Bong
Speaker 1: Chal passed away, the control of his company went to
Speaker 1: his third son, Lee Kun He. Now Samsung itself is
Speaker 1: what is called a chable, which is an institution peculiar
Speaker 1: to South Korea. Essentially, a chable is a large conglomerate
Speaker 1: of businesses that more often than not fall under a
Speaker 1: single families ownership and leadership, and it can get really
Speaker 1: complicated and be really dense and difficult to suss out
Speaker 1: who owns what percentage of which company, so you can
Speaker 1: make a lot of arguments as to whether or not
Speaker 1: things are on the up and up. Well, Lee kun
Speaker 1: He became the head of Sam Suck Group, and individual
Speaker 1: businesses and divisions fell under the control of some of
Speaker 1: his siblings. You might remember I mentioned earlier that Samsung
Speaker 1: Group kind of broke into four major components at this point,
Speaker 1: while those components went to other siblings, one of those
Speaker 1: was Lee mangy Um. He ended up taking control of
Speaker 1: the CJ Group, you remember I mentioned that earlier. Well,
Speaker 1: later on, much later on, like in two thousand twelve,
Speaker 1: Lee mang He and one of his sisters would go
Speaker 1: on to sue Lee kun He and Lee mong He
Speaker 1: was accusing his younger brother of hiding shares from the
Speaker 1: company after their father's death, and that lot loss it
Speaker 1: would last couple of years, only coming to a close
Speaker 1: in fourteen when Soul's High Court upheld a verdict that
Speaker 1: said Lee kun He was innocent of that. Really more
Speaker 1: it was more about how the the the claim of
Speaker 1: any you know, any sort of claim you would have
Speaker 1: for inheritance would have expired after ten years um had
Speaker 1: passed from the death of Young Chal and Young Chal
Speaker 1: died in so by twelve it was far too late.
Speaker 1: But that's not the end of the animosity within the
Speaker 1: Lee household. It actually gets very complicated. So one of
Speaker 1: Young Chul's daughters still second generation here, her name was
Speaker 1: Li Suki, still is Li Suki. She married into another
Speaker 1: family in Korea, another prominent family, the kulm Sung family.
Speaker 1: Now the kulm Sung family is the head of another
Speaker 1: table namely l G and as LGS electronic business began
Speaker 1: to flourish, this put a strain on relations between the
Speaker 1: Cum Song and Lee families. So that created some more
Speaker 1: tension inside the family. Now getting into the more complications
Speaker 1: in this web of relationships that were tested after Young
Speaker 1: Cholls passing, I need to talk about some of the
Speaker 1: other folks. Lee Cheung he founded a company called Sahan
Speaker 1: which was an electronics and textiles company. Also made one
Speaker 1: of the first MP three players called the MP Men.
Speaker 1: Chung he would pass away in I think he was
Speaker 1: the first of Young Choll's children to pass away, so
Speaker 1: he only you know he lived only three years after
Speaker 1: his father. Well Lee in He one of you Young
Speaker 1: Choll's daughters, another again second generation here became the leader
Speaker 1: of Samsung's home furnishing businesses, and another one of the daughters,
Speaker 1: Lee Jung Hee, would end up leading Samsung's retail businesses.
Speaker 1: Both groups of businesses would split off from Samsung. The
Speaker 1: home furnishing business split off in n and the retail
Speaker 1: business split off in n So Lee and he founded
Speaker 1: the Handsall Group, which is an electronics production company and
Speaker 1: paper manufacturing business. And according to Handsall, they have no
Speaker 1: connection with Samsung Group at all, that there's no ownership
Speaker 1: connection between the two. Leemyng he would go on to
Speaker 1: found the Shinsga Group that was the department store franchise
Speaker 1: in South Korea, and both of them are very powerful
Speaker 1: leaders in Korea as an economy. Then you had C
Speaker 1: J Child Judang, which is a business it sells all
Speaker 1: sorts of stuff including food and biopharmaceuticals. Lee mang He,
Speaker 1: the eldest of Bjong Chol's sons, lead this company and
Speaker 1: then passed it on to his son Lee j Hun so.
Speaker 1: Lee j Hun is third generation is a grandson of
Speaker 1: Bjong Cho Lee j Hun led c J child Judang
Speaker 1: until and then he was convicted of charges of theft
Speaker 1: and embezzlement and sentenced to four years in prison. He
Speaker 1: would not be the only Lee to be accused of
Speaker 1: and convicted for charges such as these. In in fact,
Speaker 1: Lee Kun He he's the guy again, the third son
Speaker 1: of the founder who had taken over control of Samsung Group.
Speaker 1: He was accused of and convicted for charges of paying
Speaker 1: bribes to Chun do Huan. That was the general who
Speaker 1: took over after Park Chung Hee's assassination. So Chount do
Speaker 1: Juan was a president of Korea. South Korea and Uh
Speaker 1: Lee Kun He was convicted of charges of bribing the government.
Speaker 1: Uh He also was accused of bribing the successor to
Speaker 1: Chun do Huan, who was Row Tai Wou. So was
Speaker 1: a bad year for Lee. Couldn't he he had these
Speaker 1: charges of bribery for two of South Korea's recent presidents
Speaker 1: but a n the then president of South Korea Kim
Speaker 1: Yong sam, this was the next successor. Granted, couldn't he
Speaker 1: a pardon? So couldn't he gets a presidential pardon in
Speaker 1: nine after being accused of bribing the two previous presidents.
Speaker 1: By the way, at this point, Korea had entered into
Speaker 1: what is called the sixth Republic, which is what it
Speaker 1: currently is in Korea's In the sixth Republic, the third
Speaker 1: and fourth republic were Park Chung He's um presidential administrations,
Speaker 1: I guess you could call it, And then you had
Speaker 1: the fifth one with Do Juan and Thai who alright, So,
Speaker 1: Kim Young sam also pursued pursued charges of corruption and
Speaker 1: treason against his predecessors Do Huan and taiwou So. The
Speaker 1: the president who granted the pardon to Samsung's Kun He,
Speaker 1: president of South Korea, also went after the two previous
Speaker 1: presidents of South Korea, but then eventually, after having them
Speaker 1: both convicted, would grant them both a pardon. So Samsung's
Speaker 1: politics are confusing, but so are Korea's, right, because you
Speaker 1: had a a current standing president accuse and convict two
Speaker 1: former presidents of corruption charges and then grant them pardons.
Speaker 1: Complicated stuff, alright, So Sam sungskun he gets his pardon
Speaker 1: in nine for those bribery charges. Then he goes back
Speaker 1: to managing Samsung. He has a son, and he had
Speaker 1: three daughters, all of whom attended school in the United States.
Speaker 1: His son Lee j Long, also known in the West
Speaker 1: as j y Lee, assumed control of fourteen internet venture companies,
Speaker 1: but they went out of business within a year, so
Speaker 1: that didn't exactly instill a lot of of enthusiasm because again,
Speaker 1: the way Samsung operates, the way Korea businesses operate, especially
Speaker 1: in this old family tradition, Jay Lee stands to inherit Samsung.
Speaker 1: His father kun He is the is the current leader
Speaker 1: and would traditionally pass it down to his eldest son. Well.
Speaker 1: J Lee is the only son of kunt He. Kun
Speaker 1: He's daughter, Lee Yun Yung, 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 it is far more complicated than that
Speaker 1: simple answer, but it was a shocking and tragic tale
Speaker 1: that made world headlines. In two thousand and eight, Lee
Speaker 1: kunhe was accused of and convicted for tax evasions. So
Speaker 1: ten years after a little bit more than ten years
Speaker 1: after his last conviction, he gets accused and convicted for
Speaker 1: another set of crimes. The charges said he failed to
Speaker 1: pay forty five million dollars in taxes and he was
Speaker 1: hit with a fine that was nearly ninety million dollars.
Speaker 1: As a result of the scandal, he was forced to
Speaker 1: resign as chairman of Samsung. That put his son, Jay
Speaker 1: Lee's claim in danger, actually, because since he had to
Speaker 1: step down, there was a question of whether or not
Speaker 1: he would be able to pass along the ownership of
Speaker 1: the company to his son. But then in two thousand
Speaker 1: nine he received another presidential pardon for giving him for
Speaker 1: his conviction of tax evasion, and in twos ten he
Speaker 1: reassumed leadership of Samsung Electronics. All right, let's get back
Speaker 1: to c J Group, which again spun off from Samsung
Speaker 1: in the early es. This was the part of the
Speaker 1: company that dealt with food and biopharmaceuticals and later got
Speaker 1: into the entertainment business, forming subsidiaries like c J Media,
Speaker 1: c J Entertainment, and c J Internet. Lee mong He,
Speaker 1: remember he was the eldest son of the founder of Samsung.
Speaker 1: He had a son, Lee j Hun, you remember I
Speaker 1: mentioned him earlier, who became the head of c J
Speaker 1: Group in two thousand two, So this is a Samsung
Speaker 1: founder's grandson. Lee j Hun would be grandson to Byung Chul,
Speaker 1: the founder of Samsung. Anyway, in Lee j Hun was
Speaker 1: arrested on charges of tax evasion and embezzlement, so you
Speaker 1: might be sensing a theme here. He would also eventually
Speaker 1: receive a pardon from the president in As for Mong He,
Speaker 1: the eldest son, he passed away in the second of
Speaker 1: Byong Chul's children to pass away. Now, of course, this
Speaker 1: is not where the story ends. You have probably heard
Speaker 1: about a scandal that is sweeping South Korea that hit
Speaker 1: worldwide news. In it is often referred to as the
Speaker 1: Choice Sun Sil scandal. Samsung is caught up in that,
Speaker 1: as well as lots of other companies and entity. So
Speaker 1: what is the scandal all about? Who? Boy? I hope
Speaker 1: you still got some popcorn? Here we go. Well, as
Speaker 1: 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 was 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: Sun Sil is the name of a woman. She was
Speaker 1: the daughter of a man named Choi Thai Men. Thai
Speaker 1: Men was the head of a set of South Korean Christians.
Speaker 1: He was formerly a Buddhist and converted to Roman Catholicism.
Speaker 1: Uh and some people call his group occult. 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 he Um, and I know
Speaker 1: I'm butchering her name, but she was. She was the
Speaker 1: daughter of Park Chung hee, the military general who became
Speaker 1: the dictator of South Korea for many years for the
Speaker 1: Third and Fourth Republics of Korea. Now Park Yun He
Speaker 1: was elected to the position of president in and she
Speaker 1: was friends with Choice Sun Sil that time. Men had
Speaker 1: passed away in the nineties, but his daughter Soon still
Speaker 1: remained very close to Gun he In twenties, team it
Speaker 1: became public knowledge that there were a string of accusations
Speaker 1: and arrests that were flooding the South Korean government, many
Speaker 1: of them targeting the people around the president herself, and
Speaker 1: the story unfolded that Soon Sealed had been using her
Speaker 1: considerable influence over the president to create favorable deals for
Speaker 1: herself and her family and her friends, and that many
Speaker 1: government officials have been accepting numerous large bribes from lots
Speaker 1: of businesses, including businesses related to Samsung. This scandal has
Speaker 1: rocked South Korea. The president has stepped down, she was impeached.
Speaker 1: She stepped down from the role of president. The Prime
Speaker 1: Minister took over. But as for Samsung, this led authorities
Speaker 1: to go investigate j Lee, whom I hope you'll remember
Speaker 1: is kun He's son and therefore a grandson of the
Speaker 1: founder Young chull So. J Lee was serving as vice
Speaker 1: chairman for Samsung Electronics is essentially the heir apparent to Samsung.
Speaker 1: He was accused of bribery, among other things, and was
Speaker 1: arrested in January seventeen. The accusations include one that says
Speaker 1: that he made sizeable contributions to the tune of about
Speaker 1: thirty five million dollars to two nonprofits that Choye Soon
Speaker 1: Seal allegedly controls Now the story is still unfolding at
Speaker 1: this time of the recording, and so the future of
Speaker 1: Samsung leadership remains an open question. It could turn out
Speaker 1: that it has merit and that Jay Lee will be
Speaker 1: convicted of these charges. It could turn out that we
Speaker 1: see yet another presidential pardon, come out and UH absolve
Speaker 1: him of these charges. Who knows one possible successor to
Speaker 1: the Samsung Empire could be Kunh's daughter, Lee bou Jin.
Speaker 1: She is sometimes referred to as Little Kun Heat by
Speaker 1: the Korean public. She's the president of Hotel Shila and
Speaker 1: co president of Samsung Everland, which is a company it
Speaker 1: oversees Korea's oldest amusement park under the umbrella of Child Industries. Now,
Speaker 1: if you listen to part one of the Samsung Story,
Speaker 1: you might remember I mentioned Child Industries in that episode.
Speaker 1: It started off as a very humble business. It was
Speaker 1: a woolen mill back when Samsung first was diversifying in
Speaker 1: the mid twentieth century. Well, liebu Jin's sister, Lee Shun,
Speaker 1: is the other co president of Child Industries, so the
Speaker 1: two sisters sit at the top of that company. There
Speaker 1: was also a recent story where in an effort to
Speaker 1: streamline things, there was a plan to have Child Industries
Speaker 1: acquire Samsung C and T. So that's not the overall
Speaker 1: Samsung company, it's the construction and transportation company that's was
Speaker 1: part of Samsung. But Paul Singer, who is an investor
Speaker 1: UH 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: C and T and that shareholders wouldn't be paid a
Speaker 1: fair amount for their their ownership. Um that caused some
Speaker 1: headaches over on the Samsung side for the leadership for
Speaker 1: the Lee family, I suppose I should say shareholders have
Speaker 1: pressured Samsung trying to get them to change to a
Speaker 1: more traditional holding structure, you know, like with a board
Speaker 1: of directors and that sort of thing. Many other tables
Speaker 1: in Korea have given up the ghosts, they have disappeared,
Speaker 1: They got broken up by the government and dispersed and
Speaker 1: turned into more traditional Western style corporations. But Samsung's Lee
Speaker 1: family has not followed suit, and they have been putting
Speaker 1: up resistance to this and have said that it's completely
Speaker 1: unnecessary and in fact would end up causing more harm
Speaker 1: than good. That's their claim. So you could say they
Speaker 1: are disinclined to acquiesce to such pressures. The company itself
Speaker 1: is so vad and complicated that it's hard to wrap
Speaker 1: your mind around the whole thing. And seriously this could
Speaker 1: be an amazing documentary following the story of Samsung's ruling
Speaker 1: family as they gain prestige and power, occasionally turning on
Speaker 1: one another in the process. I really do think it's
Speaker 1: like like Game of Thrones mixed with sopranos, mixed with
Speaker 1: a few other big stories about enormous, sprawling families and
Speaker 1: their control of important interests. Not saying that it's necessarily
Speaker 1: all self serving or dark or anything like that, but
Speaker 1: there's definitely a lot of politics going on behind the scenes.
Speaker 1: Fascinating stuff, and I want to learn more, and maybe
Speaker 1: in the future I will do another episode to kind
Speaker 1: of shed more light onto this company. But I felt
Speaker 1: like a two parter was the best approach in this case,
Speaker 1: because the more I looked into this, the more I
Speaker 1: realized that I just I lack the cultural knowledge to
Speaker 1: dive into it even further. I would have to study
Speaker 1: this for a couple of weeks to really get my
Speaker 1: head around it. So maybe I will revisit it in
Speaker 1: the future, but I think it's a pretty fascinating story.
Speaker 1: If you guys have any suggestions for future episodes of
Speaker 1: Tech Stuff, or maybe you've got an idea for someone
Speaker 1: who should be a guest on our show. You should
Speaker 1: go and let me know via email. The address for
Speaker 1: this podcast is tech stuff at how stuff Works dot com,
Speaker 1: or you can drop me a line on Facebook or Twitter.
Speaker 1: The handle for the show is tech Stuff h s W.
Speaker 1: Normally I would be streaming live on twitch dot tv
Speaker 1: slash tech Stuff, but as I'm recording this right now,
Speaker 1: our office is suffering some internet connectivity issues, so I'm
Speaker 1: just recording an episode. No one's getting to watch this
Speaker 1: amazing performance I'm giving over here, which is a pity.
Speaker 1: But usually you can watch me record the show live
Speaker 1: on Wednesdays and Friday's. Just go to twitch dot tv
Speaker 1: sladh tech Stuff and you can find the schedule there
Speaker 1: and I will talk to you guys again really soon
Speaker 1: for more on this and thousands of other topics. Is
Speaker 1: it how stuff Works dot com.