Lee Kun-hee, the Samsung Group's chairman who was indicted on tax evasion charges, announced Tuesday that he would step down after 20 years of leadership during which Samsung soared to become South Korea¡¯s best-known global brand but was dogged by corruption scandals.

FOR life, death and everything in between in South Korea, Samsung is there. It can even make you more eligible in the marriage stakes.

    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 more than 20 years, Lee Kun-hee, said he was stepping down after being indicted for tax evasion and breach of trust.

    The 66-year-old tycoon was brought down by the flip side of Samsung’s enormous success: a recurring penchant for scandal and nagging questions about corporate governance.

    Lee is widely credited as the visionary who transformed Samsung Electronics Co. from a purveyor of mostly cheap televisions and other household goods into a global force in technology.

    “Making and selling faulty products is like producing and spreading poison,” the Japan-educated Lee once famously wrote in a Samsung management guide.

    Other companies in the sprawling conglomerate include Samsung Heavy Industries Co., one of the world’s largest shipbuilders. Samsung C&T Corp., the group’s construction and trading arm, is building what it touts as the world’s tallest skyscraper in Dubai.

    Samsung is perceived as playing such a pivotal role in the South Korean economy — where group companies account for as much as one-fifth of exports — that South Koreans sometimes call their country the “Republic of Samsung.”

    Lee made key strategic decisions that led to Samsung entering new fields, where it usually made major inroads, often at the expense of Japanese rivals.

    Not all such moves were successful, however. A foray into the auto industry in the 1990s proved disastrous.

    Lee’s tenure, like that of many of the energetic and driven men who have led the country’s ubiquitous family-run “chaebol” — the Korean word for conglomerate — was also marked by a less savory side that illustrated often cozy ties between the big business groups and the political elite.

    He was convicted in 1996 for having made payments to South Korean President Roh Tae-woo, who served from 1988 until 1993.

    Lee was also investigated three years ago amid a presidential election funds scandal dating to the late 1990s for which state prosecutors eventually decided not to press charges.

    Nevertheless, Samsung felt compelled to try and regain public trust, announcing in 2006 that it would donate the equivalent at the time of about US$800 million worth of assets to society, a promise it kept.

    Lee was also dogged for years by civic groups claiming Samsung’s opaque ownership structure based on cross-shareholdings by group companies led to abuses and was meant to ensure that control of the conglomerate passed seamlessly from Lee to his son.

    The scandal that would ultimately bring him down started late last year with explosive allegations — by Samsung’s former top lawyer — of organized bribery of prosecutors and other influential South Koreans.

    Although the bribery claims were dismissed as groundless by an ensuing independent counsel investigation, the probe led to Lee being charged last week for alleged tax evasion and breach of trust. Nine other Samsung executives were also indicted.

    In South Korea, joining Samsung is said to make a person a better candidate for marriage.

    And the reclusive Lee family is the aristocracy of the country’s entrepreneur class.

    The changes Samsung unveiled 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.

    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.

    Lee Kun-hee is married to Hong Ra-hee. He has one son and three daughters. His youngest daughter, Lee Yoon-Hyung, was found dead in her Manhattan apartment Nov. 18, 2005, having committed suicide.

    His hobbies are golf, equestrian sports, table tennis, watching movies and listening to classical music.

    (SD-Agencies)

    Facts about Samsung Group

The beginning

Samsung was founded by Lee Kun-hee’s father Lee Byung-chull in 1938 and began as a trading company with about 40 employees. The company prospered moderately until the 1950 Korean War wiped out much of his stock. When the war ended in 1953, Lee Byung-chull began moving the company into manufacturing businesses, setting up a sugar refinery and a textile factory.

The 1960s

Service businesses such as insurance, securities and department stores soon followed. In the early 1960s Samsung moved into mass communications by starting a radio and television station.

Conglomerates thrived

Samsung and other family-owned conglomerates thrived under the 1961-1979 rule of President Park Chung-hee. In 1969 Samsung Electronics was established.

Global success

In 1987, Lee Kun-hee took over Samsung following the death of his father. In 1993, the company became the world’s largest producer of memory chips.

Branching out

Three of its key entities are Samsung Electronics, Samsung Engineering & Construction and Samsung Heavy Industries. Group-wide assets are valued at US$280.8 billion and its exports were worth US$70 billion last year, more than 20 percent of South Korea’s total. The company has 200,000 staff in 59 affiliates.

(SD-Agencies)