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June 16, 2000 VOL. 29 NO. 23 | SEARCH ASIAWEEK All in the Family No More That is what chaebol critics want to happen By LAXMI NAKARMI Seoul The Korean media call him simply "JY." Jae Yong is the only son of Samsung chairman Lee Kun Hee, and one can guess the question stirring speculation in leading newspapers, business journals and tabloids: Will the old man take the young one into the boardroom? In fact, JY, 31, is not involved in any Samsung company. "He does not even live in Korea as he is pursuing a doctoral degree in the U.S.," says Lee Sun Dong, executive director at the chaebol's restructuring unit. Well, he certainly hasn't done badly for someone so far away from Samsung's executive suites. The People's Solidarity for Participatory Democracy has constantly questioned how JY made lucrative gains on the cheap warrants he was allotted by flagship Samsung Electronics and Samsung SDS. Governance advocate and Korea University professor Jang Ha Sung has also attacked the "unethical" transfer of wealth by group companies to the children of its chairmen. Asset plays are one thing, but taking over the family conglomerate is quite another. Unlike other chaebol, where scions of the founding family have taken most key positions, major Samsung companies have professional executives running things. With foreigners owning large chunks of Samsung companies, says Jang, JY coming in would hardly make a ripple. The young Lee himself seems more interested in online and high-tech businesses than those Samsung is involved in. "I won't be surprised if JY demonstrates his own capability by running his own Internet company successfully," says a top Samsung executive familiar with the son's activities. The authorities and the public would not mind if that is exactly what happens. "The government would like to see professional managers take control of major companies, and we are even considering incentives," says Lee Ki Ho, senior economic secretary to President Kim Dae Jung. The role of hired bosses has been improving. In the LG Group a six-member committee made up of Koo family members and professional managers plots strategy. Meanwhile, Chey Tae Won of the SK Group's controlling family has given up the chairmanship. "He demonstrated the ability to understand management issues," says advocate Jang. What's more, the professor and the tycoon have clashed over wealth transfers to family members -- and Chey has accepted nearly all of Jang's demands. Write to Asiaweek at mail@web.asiaweek.com
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