Samsung’s empire

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Samsung's empire

The heir of  Samsung’s empire has just been released from prison.

 

Now you’re wondering: how can such a company have an heir and why on earth was he in prison ?

 

How big is Samsung’s empire ?

Fun fact : Samsung means “3 stars” in Korean. Now you can show off at your next party with this additional invaluable knowledge.

We all know their consumer electronics: phones, fridges, washing machines, TV… but they are involved in way more industries.

Unlike Apple, they have a huge production capacity. Samsung has 17% of the whole micro chip industry, making it the second biggest producer after TSMC (who has 54% of market share, and 90% for the advanced chips).

They also have some building activities. For example, they were involved in building the Burj Khalifa.

 

They have  activities in the nuclear industry, shipbuilding, insurance, guns, pharmaceuticals, hospitals…
Samsung even owns and operates an amusement park : Everland.
To be honest, this park looks fun. They have a zoo, a safari, and they even have these alleys with umbrellas suspended and a rose garden.

Fancy!

 

To sum up, Samsung Electronics, is an enormous company. It has 78 different entities.

It is hard to know exactly the turnover of the whole group, but out of six entities, the turnover last year was more than $303 billion.

 

Samsung is so big, that it accounts for 17% of Korea’s GDP.

 

Buying impunity ?

 

As you might expect, with this extreme concentration of wealth comes scandals.
Some are trivial, such as the “nut rage” incident (with Korean Air heiress) or the “saccharine smuggling” of Samsung’s founder, Byung-Chull LEE.
But other scandals can be a serious undermining of Korea’s democracy.

 

The son of the founder, Kun-Hee LEE, was indicted several times for embezzlement and bribes. He was granted two times a presidential pardon and never set foot in prison.

In 2017, Jae-Yong LEE was arrested for bribing the Korean president in exchange for business favours. Among other things, he offered an $800 000 horse to the daughter of the president.

Samsung’s defence was that the company was a victim of extortion by the president. They were forced to give her millions… It’s not bribery !

 

LEE got a 12 years conviction. The president was impeached and got 25 years of prison…

Democracy seemed to be working.

Until both got presidential pardons. Jae-Young stayed only a few months in jail and eventually took Biden on a tour this August.

 

Impact on Korea

 

Samsung is part of the “Chaebol”. They are the biggest industrial corporation in Korea. They are owned by families, heavily diversified and are intertwined with other Chaebols.
Hyunday, LG and SK Group are part of the “big four” within the Chaebols.

The top 5 chaebols account for 80% of the earnings of the 500 biggest companies of Korea.

 

Of course, the population, especially the youngest, is sick and tired of this impunity.

This is even stronger as some of these companies reach the third generation, merit cannot justify behaviour anymore.

Such concentration also comes at the cost of limited possibilities for new players to come and middle-sized companies to grow.

 

Scandals are also mounting, not only on Samsung, but each chaebol has its own hall of shame.

 

The same week, a leader of another huge company, Lotte, also got a presidential pardon.

 

Other scandals include: