SEOUL (Reuters) - For life, death and everything in between in South Korea, Samsung is there. It can even make you more marriageable.
The Samsung Group is the country’s largest conglomerate and has its hands in maternity wards and funeral halls, memory chips and supertankers as well as credit cards and life insurance.
On Tuesday, the man who ran the group for over 20 years, Lee Kun-hee, said he was stepping down after being indicted for tax evasion and breach of trust.
Lee’s Samsung has been a constant in the lives of Koreans over the past two decades as the country moved to open democracy, emerged as one of the biggest economies in Asia and a global producer of high-end consumer goods.
“People believe Samsung is a company that never fails, which is why to them the person who built up that group with his management skills, Lee Kun-hee, is thought to be god-like,” said Kim Sang-jo, executive director of Solidarity for Economic Reform, which is calling for better corporate governance.
Samsung, which means “three stars”, is South Korea’s best-known brand as well as its flagship firm for global success.
At home and abroad it is an inescapable presence with a name emblazoned on televisions and mobile phones. Its chips power computers and handheld communications devices. It is one of South Korea’s staunchest patrons of the arts and a global sponsor for the Olympics.
The list of Samsung products and services is dizzying. It makes clothes and precision glass. It provides economic advice for the government. It runs hotels, a baseball team and the country’s biggest amusement park.
In South Korea, joining Samsung is said to make a person a better candidate for marriage.
And the reclusive Lee family that runs the group is the aristocracy of the country’s entrepreneur class.
The reforms Samsung unveiled on Tuesday are supposed to eventually divorce the Lee family from that control but skeptics doubt if South Korea’s first family of commerce will ever relinquish its role at the firm it started in 1938.
The Lee family holds a tiny share in the group but maintains its influence through a complicated network of cross shareholdings among group companies. At the top of the structure is unlisted Everland, an amusement park operator that serves as the de facto holding firm.
Lee’s son, Lee Jae-yong, seen as being groomed to take over, will step down from his executive post and work abroad for the group in another, unspecified role.
Some say that Samsung was able to overtake rivals such as Sony in size because its centralized control allows the group to implement long-term policies instead of having to change course each quarter due to investors looking for quick gains.
“The reform plan may have a negative impact on the group companies because Lee Kun-hee’s resignation would dent the group’s leadership and increase uncertainties around the management,” said Choi Chang-ho, an analyst at Goodmorning Shinhan Securities.
Others are not overly worried about a power vacuum, saying companies such as its flagship Samsung Electronics have developed a management team skilled at competing globally.
Samsung said in a statement that more shake-ups are in store.
But for now, chairman Lee still maintains a stake in the group and the complex web that allows him to keep power is not slated to be unraveled for several years.
Additional reporting by Marie-France Han and Lee Jiyeon; Editing by Keiron Henderson and David Fogarty