The Bow That Ended a Dynasty: Three Generations of Samsung

At three in the afternoon on May 6, 2020, at Samsung Electronics headquarters in Seoul, a fifty-two-year-old man in a dark suit bowed deeply to the cameras, then read an apology containing a sentence no chaebol chief had ever spoken in public: “I will not pass management rights on to my children.”

Lee Jae-yong made three promises — no more succession disputes, no more obstruction of unions, no handover to his children — and Reuters reached for the phrase “end of a dynasty.” Samsung Electronics was then the world’s largest maker of smartphones, televisions, and memory chips, its revenue equal to a tenth of South Korea’s GDP; Koreans nickname their country “the Republic of Samsung.” So was the price already paid for heredity: a deposed eldest son; a second son imprisoned, later an informer against his own father; a chief twice convicted, twice pardoned; an heir twice jailed; a daughter dead by her own hand at twenty-six. That family now declared: heredity ends with me. Start eighty-two years earlier.

Moonlight, Dice, and Three Stars

One night in 1936, in Korea’s far south, a landlord’s son of twenty-six came home from a night of gambling. “The bright moon shone through the window,” Lee Byung-chul wrote later. “Watching my three children sleep in the moonlight, I woke as if from a nightmare.” His first venture — a rice mill, a truck line, farmland, all levered on bank loans — failed within two years. He distilled three rules: judge conditions objectively, never count on luck, never borrow beyond your own judgment. They hardened into “rational pursuit,” one of Samsung’s three mottos beside “business serves the nation” and “talent first.”

In March 1938, in Daegu, he opened Samsung — three stars — Trading Company: thirty thousand won of his own capital, nineteen employees, dried fish and produce for Manchuria. “Three” meant big, many, strong; “star” meant bright, high, everlasting. By 1950 he was one of Seoul’s richest traders — then war zeroed him out. He fled south with five trucks carrying employees rather than goods, and rebuilt from wartime Busan within a year. Two wipeouts left one conviction: property is fragile; the only portable assets are judgment and people.

Sugar, Wool, and the Man in Dark Glasses

In 1953 he put his war profits into factories. Cheil Jedang produced Korea’s first domestic sugar by year’s end — spun off later, it is today’s CJ Group — and Cheil Industries followed in 1954. More durable were two inventions: the first open recruitment examination in Korean corporate history, in 1957, replacing blood and connections with test scores; and the secretariat, from 1959, which grew to run finance, audit, and personnel across every subsidiary — the chairman’s eyes, ears, and hands, and the shadow protagonist of this story. The most open way of choosing people, the most centralized way of using them: scholars would call it the Samsung paradox.

Politics forced a third: the survival bargain. Summoned home after the 1961 coup to face a man in black sunglasses — Park Chung-hee — Lee surrendered his bank shares, paid $4.4 million in taxes and fines, pledged Samsung to the state’s industrialization drive, and went free. His private rule: “With the regime — not too far, not too close.” But every quota and cheap loan would be billed back as political money, and the interest on the 1961 contract came due in courtrooms in 2008 and 2017.

The Manure Bucket and the Third Son

On September 22, 1966, a lawmaker hurled a bucket of excrement at the cabinet bench in the National Assembly, shouting, “Eat the saccharin!” At Korean Fertilizer’s showcase Ulsan plant, a banned saccharin precursor imported as building material had been resold. That day Lee Byung-chul donated 51 percent of the company to the state and retired; his second son, Lee Chang-hee, served six months in prison for it.

Eldest son Lee Maeng-hee took over as proxy. The father’s autobiography grants him one line: within six months the group fell into confusion and he withdrew. The son’s memoir replies: seven years, not six months, and the family treated him “as a mental patient.” The second son fell darker: frozen out after prison, Lee Chang-hee in 1969 denounced his father to the Blue House as the smuggling’s mastermind. Park Chung-hee declined to act and forwarded the letter to the father: the regime wanted loyalty, not family secrets. Chang-hee was banished, and suspicion of complicity finished Maeng-hee too. In 1969, the year the family broke, Samsung Electronics was founded to assemble black-and-white televisions.

The choice fell on the third son. Lee Kun-hee had been sent to Tokyo at eleven — “Go and see an advanced country” — and spent three lonely years there as a bullied colonial schoolboy. In 1976, before cancer surgery, Lee Byung-chul gathered the family: “From now on, Kun-hee will lead Samsung.” The apprenticeship ran eleven years — no independent command, a seat beside the father, and a brush-written gift of one word: “Listen.” The bill for passing over two sons arrived on schedule: a lawsuit between brothers in 2012, and the founder’s memorial rites held, to this day, in two places at once.

”We Are Too Late”

In 1974 the thirty-two-year-old heir bought half of a failing chipmaker with his own money, reasoning that a resource-poor country can compete only in industries of the mind. Eight years later the father caught up: in Silicon Valley in 1982, he said four words — “We are too late.” On February 8, 1983, from Tokyo’s Okura Hotel, he telephoned Seoul: “No matter what anyone says, Samsung will do semiconductors. Announce it.” The declaration argued in national terms: a crowded country, three-quarters mountains, without oil or uranium, rich only in educated, diligent people, would stake its “great spiritual strength and creativity” on chips. The bet, 540 billion won over five years, could have buried the group. The seventy-three-year-old closed the debate with a personal guarantee: “If anything goes wrong, I will bear the responsibility.” Only a decision-maker who thinks in generations, not tenures, signs such a thing.

Execution became legend. The Kiheung fab, a three-year project by world standards, went up in six months, concrete poured in midwinter — “Thinking we’d go bankrupt,” the plant chief said of what drove them. The 64K DRAM arrived that December, 4.5 years behind Japan; the gap closed release by release, and with the 16M in 1989 Samsung led the world. Lee Byung-chul died in November 1987 at seventy-seven; within twenty-five minutes, thirty-seven subsidiary presidents unanimously elected his forty-five-year-old son chairman. Months later, executives laid the first 4M DRAM sample on the founder’s grave — the most precise object human industry then made, offered to a man who had started with dried fish.

Frankfurt, Room 312

For five years the group, fat on DRAM profits, ignored its new chairman’s speeches; by 1992 he was sleeping under four hours a night: “I despaired that Samsung might wither entirely.”

In June 1993, in room 312 of Frankfurt’s Kempinski hotel, he watched secretly filmed footage from a washing-machine line: covers failed to fit, and workers shaved two millimeters off each with a utility knife. Twenty minutes of tape; nobody fixed the mold. He telephoned Seoul in a rage and summoned two hundred senior executives to Frankfurt. He spoke for eight hours without a script. The sentence that survived: “Change everything except your wife and children.” Over sixty-eight days he carried the sermon to London, Osaka, and Tokyo — forty-eight sessions, 350 hours of speech. Five years of directives had been filed and forgotten; a staged crisis was remembered.

The crescendo came in 1995, after gift phones wouldn’t connect: the defect rate neared one in eight. On March 9, on the Gumi plant’s sports ground, two thousand employees watched colleagues hammer 150,000 recalled phones and fax machines to pieces and burn them; workers who had built them wept “as if their children had died.” But the reform’s engine was also its flaw — one man watching the tape, one man preaching, a hundred thousand listening. The system assumed the man on the throne would always be lucid.

The Cheapest Road

In 1996 the board of Everland — the amusement park atop Samsung’s shareholding loop — issued convertible bonds at 7,700 won per share, shares the tax law’s own valuation put at 127,750. The largest allocation went to the twenty-eight-year-old Lee Jae-yong, who paid 4.8 billion won. Everland held Samsung Life, Life held Electronics, Electronics held Samsung Card, Card held Everland: whoever held Everland held the keys to the empire. It was one link in a chain, each legally formed, that moved control to the third generation at a total tax cost below one percent. Courts circled the bond for nine years and convicted only the two executives who signed.

Why tunnel? Korea taxes controlling inheritances at an effective rate near sixty percent and forbids dual-class shares. The Fords locked 40 percent of the votes with 2 percent of the equity in a prospectus; the Wallenbergs use foundations; Korean law allows neither. Where institutions provide no sunlit road, capital digs tunnels. Yet LG’s heir inherited in 2018 through a transparent holding company and simply paid 921.5 billion won of tax, without a day in court. The tunnel was merely the cheapest road, and its true price was billed later.

Meanwhile the empire nearly died. The 1997 crisis found the group 366 percent geared; subsidiaries fell from fifty-nine to forty, headcount from 163,000 to 113,000. The chairman’s car venture, forced through against near-unanimous advice, collapsed — nothing could stop him when he was wrong. The tunnels vented in 2007, when the group’s former chief counsel alleged 4.5 trillion won of slush funds in 1,199 borrowed-name accounts. Indicted for tax evasion, Lee Kun-hee resigned in 2008, was convicted with a suspended sentence, and in December 2009 was pardoned, alone that day, to keep his IOC seat for the Pyeongchang bid. “Samsung,” said one economist, “is above the law and the government.”

A Merger and a Horse

On May 10, 2014, Lee Kun-hee suffered a heart attack. He survived but was thereafter simply absent: six and a half years in a hospital room, never seen or heard in public again. He had inherited a group with annual sales of 10 trillion won; the year he collapsed, the figure was 334 trillion.

May 2015 brought the last piece: Cheil Industries — the renamed Everland, of which Lee Jae-yong owned 23.2 percent — would absorb Samsung C&T at 1 to 0.35, though C&T dwarfed Cheil and held 4 percent of Electronics — and Lee owned no C&T at all. Elliott fought; five thousand employees courted small shareholders; the swing voter, the National Pension Service, skipped its review rules and voted yes behind closed doors. On July 17, 2015, the merger passed with 69.53 percent. The minister who had pressured the fund, and the fund’s investment chief, later went to prison for it. Every hand that waved the merger through eventually felt handcuffs; only the merger itself remained.

What criminalized it was a horse. President Park Geun-hye had privately told Lee to fund the national equestrian federation; an aide’s notes, seized later, decoded the request — use Samsung’s succession problem as leverage. Samsung signed an $18.6 million contract with a German company — registered the day before, owned by the president’s confidante Choi Soon-sil, her daughter the sole trainee — and bought an $830,000 dressage horse named Vitana V. When the scandal broke in late 2016, candlelight crowds peaked at 420,000 a night, the president fell, and prosecutors raided Samsung. At a thirteen-hour parliamentary hearing Lee answered 436 questions and said: “If there is someone better than me, I will hand over management at any time.” The same quarter, the burning Galaxy Note 7 cost $6.1 billion.

On February 17, 2017, he entered a 6.5-square-meter solitary cell: a mattress on the floor, no shower, one appliance — a television made by LG. Eleven days later the Future Strategy Office — the secretariat’s final form, fifty-eight years on — was dissolved. A first court gave him five years; an appeals court freed him after 353 days; in August 2019 the Supreme Court ruled all three horses Samsung had provided were bribes, and sent the case back. Released, he drove not to the office but to the hospital, to a father who never learned any of it.

The Twelve-Trillion-Won Penance

Lee Kun-hee died on October 25, 2020, at seventy-eight. In April 2021, two days before the filing deadline, the family announced its settlement: an inheritance-tax bill above 12 trillion won — more than any family anywhere had ever paid at once. The avoidance technology existed; this time the family paid in full. With the tax came a giving-away: all twenty-three thousand pieces of the chairman’s art collection, sixty national treasures among them, from Kim Whanki to Monet and Picasso, went to the national museums, plus a trillion won for medicine, including Korea’s first dedicated infectious-disease hospital — read as the late honoring of the father’s shelved 2008 pledge to put his hidden assets to good use — a son cashing his father’s bounced check.

The 2020 bow had in fact been prescribed: a new compliance committee had demanded a public apology on succession. Skeptics called it theater for the sentencing bench; the judges half agreed, ruled the effort insufficient for leniency, and jailed Lee Jae-yong again in January 2021 for two and a half years. But the other half of the skepticism wore away: the no-union era genuinely ended, no new gray engineering appeared, and “not to my children” is still cited, six years on, as a standing constraint. A promise born as legal mitigation outlived the legal process. Paroled in 2021 and pardoned in 2022, he became chairman of Samsung Electronics that October, thirty-one years after joining. The final case, over the merger itself, ended on July 17, 2025 — the vote’s tenth anniversary — in acquittal on all nineteen counts; the prosecuting official publicly apologized. Eight years and eight months of siege, some 560 days behind bars — and one unplanned legacy: life without a control tower taught the professional managers to decide alone.

The estate moved control in daylight: the pivotal Samsung Life shares went half to Lee Jae-yong, a third to Lee Boo-jin, a sixth to Lee Seo-hyun, their mother taking none, while Hong Ra-hee became Electronics’ largest individual shareholder at 2.30 percent. Mother and daughters sold some 10 trillion won of stock to pay it; Lee Jae-yong sold not one Electronics share, and his Samsung C&T stake rose past 20 percent. The first succession took the tunnel and paid in decades of courtrooms and public distrust. The second took the sunlit road and paid 12 trillion won, twenty-three thousand artworks, and a vow to end heredity. The second succession was, at every step, penance for the first.

The chip division lost a record 14.9 trillion won in 2023 and fell behind in AI memory; by early 2026 record profits had answered — the same month SK Hynix took the market-value crown Samsung had held for twenty-five years. In September 2025 the chairman’s son, Lee Ji-ho, twenty-five, renounced his U.S. citizenship and entered the navy’s officer school for thirty-nine months. Under his father’s pledge, neither he nor his sister will run Samsung.

On a Hannam-dong hillside stands Seungjiwon, the founder’s residence turned guesthouse; the name means “carrying on the father’s aspiration.” One generation vowed that building industry was building a nation; the next forged an empire with 350 hours of sermons and a bonfire, inheriting with it the contract with power; the third, after the cells and the courtrooms and the tax bill, declared the pipeline closed. Lee Byung-chul understood everlasting to mean the family’s hand forever on the company; his grandson’s answer is that the company may outlive the family only if the hand lets go. The grandfather bet on an industry; the grandson bet on a farewell. What is carried on was never the throne — it is the aspiration. At night the lamps of Seungjiwon still come on. Three generations have passed beneath them, and the lamps stay lit.