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South Korea’s court rules in favour of Samsung patriarch

A court in Seoul has ruled in favour of Samsung’s second-generation chairman ensuring the current family ownership of the world’s biggest maker of smart phones will remain in place.
Samsung chairman Lee Kun-hee
© Press Association

A court in Seoul has ruled in favour of Samsung’s second-generation chairman ensuring the current family ownership of the world’s biggest maker of smart phones will remain in place.

The court ruled in favour of Lee Kun-hee, Samsung's second-generation chairman in three cases brought against him by five of his relatives, allowing Lee to hold on to $3.7 billion (€2.7 billion) worth of company shares that the plaintiffs had tried to obtain.

The relatives, including his older brother Lee Meng-hee, accused Lee of hiding billions of dollars worth of assets inherited from his father, Samsung founder Lee Byung-chull, in Samsung Life and Samsung Electronics.

But the court ruled that the lawsuits fell outside the 10-year period for inheritance claims. Byung-chull died in 1987.

Had Lee lost the case, his shareholding would have been diluted, which analysts reckoned could have forced a complicated reorganisation of the group's ownership structure that possibly could have led to a breakup of the conglomerate. The decision comes just a month after Lee's son, 44-year-old Jay, was promoted to vice-chairman.

Samsung Electronics is the world's largest manufacturer of smartphones, TVs and memory chips. Lee has only a 4% stake in Samsung Electronics, but through his stakes in Samsung Everland and Samsung Life he is able to exercise control of the electronics brand and the rest of Samsung's 80-odd divisions.

Lee is South Korea's richest man, with an estimated $8.3 billion, according to Forbes. In 2008 he was convicted of embezzlement and tax evasion but was pardoned by then-president Lee Myung-bak in 2009.

President-elect Park Geun-hye has vowed to break the strangle-hold the chaebols have on South Korea's economy, making it the main promise of her election campaign. She is due to take office on 25 February.

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