Samsung chairman Lee Kun-hee who transformed the South Korean firm into a global tech titan dies age 78

Lee Kun-Hee, the ailing Samsung Electronics chairman who transformed the small television maker into a global giant of consumer electronics, has died. He was 78.

A Samsung statement said Lee died on Sunday with his family members, including his son and de facto company chief Lee Jae-yong, by his side.

Lee Kun-Hee had been hospitalized since May 2014 after suffering a heart attack and the younger Lee has run Samsung, the biggest company in South Korea.

'All of us at Samsung will cherish his memory and are grateful for the journey we shared with him,' the Samsung statement said. 'Our deepest sympathies are with his family, relatives and those nearest. His legacy will be everlasting.'

A Samsung statement said Lee Kun-Hee (pictured in 2011) died on Sunday with his family members, including his son and de facto company chief Lee Jae-yong, by his side

Chairman Lee as a child together with his father Lee Byung-chull and mother parents, in South Korea

Lee Kun-hee with wife Hong Ra-hee at a Dinner to Mark the 20th Anniversary of His 'New Management Initiative' at a Hotel in Seoul South Korea in 2013

Chairman Lee and wife Hong Ra-Hee in 2012 and leaving for a conference in Japan in 2011

Lee Kun-Hee inherited control from his father and during his nearly 30 years of leadership, Samsung Electronics Co. became a global brand and the world´s largest maker of smartphones, televisions and memory chips. 

Samsung sells Galaxy phones while also making the screens and microchips that power its rivals, Apple´s iPhones and Google Android phones.

Samsung helped make the nation´s economy, Asia´s fourth-largest. Its businesses encompass shipbuilding, life insurance, construction, hotels, amusement park operation and more. Samsung Electronics alone accounts for 20% of the market capital on South Korea´s main stock market.

Lee leaves behind immense wealth, with Forbes estimating his fortune at $16 billion as of January 2017.

His death comes during a complex time for Samsung.

When he was hospitalized, Samsung´s once-lucrative mobile business faced threats from upstart makers in China and other emerging markets. Pressure was high to innovate its traditionally strong hardware business, to reform a stifling hierarchical culture and to improve its corporate governance and transparency.

Samsung was ensnared in the 2016-17 corruption scandal that led to then-President Park Geun-hye´s impeachment and imprisonment. Its executives, including the younger Lee, were investigated by prosecutors who believed Samsung executives bribed Park to secure the government´s backing for a smooth leadership transition from father to son.

President of the International Olympic Committee Jacques Rogge, right, meets with South Korean President Lee Myung-bak, left, and Samsung Chairman Lee Kun-hee in Durban, South Africa in July 2011

In a previous scandal, Lee Kun-Hee was convicted in 2008 for illegal share dealings, tax evasion and bribery designed to pass his wealth and corporate control to his three children.

The late Lee was a stern, terse leader who focused on big-picture strategies, leaving details and daily management to executives.

His near-absolute authority allowed the company to make bold decisions in the fast-changing technology industry, such as shelling out billions to build new production lines for memory chips and display panels even as the 2008 global financial crisis unfolded. Those risky moves fueled Samsung´s rise.

Lee was born January 9, 1942, in the southeastern city of Daegu during Japan´s colonial rule of the Korean Peninsula. His father Lee Byung-chull had founded an export business there in 1938 and following the 1950-53 Korean War, he rebuilt the company into an electronics and home appliance manufacturer and the country´s first major trading company.

Lee Byung-chull was often called one of the fathers of modern industrial South Korea. Lee Kun-Hee was the third son and his inheritance of his father´s businesses bucked the tradition of family wealth going to the eldest. One of Lee Kun-Hee's brothers sued for a bigger part of Samsung but lost the case.

When Lee Kun-Hee inherited control from his father in 1987, Samsung was relying on Japanese technology to produce TVs and was making its first steps into exporting microwaves and refrigerators.

The company was expanding its semiconductor factories after entering the business in 1974 by acquiring a near-bankrupt firm.

A decisive moment came in 1993. Lee Kun-Hee made sweeping changes to Samsung after a two-month trip abroad convinced him the company needed to improve the quality of its products.

In a speech to Samsung executives, he famously urged, 'Let´s change everything except our wives and children.'

Not all his moves succeeded.

Samsung Electronics' Seocho building is seen in Seoul, South Korea on Sunday

A notable failure was the group´s expansion into the auto industry in the 1990s, in part driven by Lee Kun-Hee´s passion for luxury cars. Samsung later sold near-bankrupt Samsung Motor to Renault. The company also was frequently criticized for disrespecting labor rights. Cancer cases among workers at its semiconductor factories were ignored for years.

In 2020, Lee Jae-yong declared heredity transfers at Samsung would end, promising the management rights he inherited wouldn´t pass to his children. He also said Samsung would stop suppressing employee attempts to organize unions, although labor activists questioned his sincerity.

South Koreans are both proud of Samsung´s global success and concerned the company and Lee family are above the law and influence over almost every corner of society.

Critics particularly note how Lee Kun-Hee´s only son gained immense wealth through unlisted shares of Samsung firms that later went public.

In 2007, a former company lawyer accused Samsung of wrongdoing in a book that became a best seller in South Korea. Lee Kun-Hee was subsequently indicted on tax evasion and other charges.

Lee resigned as chairman of Samsung Electronics and was convicted and sentenced to a suspended three-year prison term. He received a presidential pardon in 2009 and returned to Samsung´s management in 2010.

South Korea's 'hermit king' who transformed Samsung into one of the world's tech giants

Lee Kun-hee inherited the chairmanship of the Samsung group in 1987 - founded by his father as a fish and fruit exporter - it was already the country's largest conglomerate, with operations ranging from consumer electronics to construction.

But Lee transformed it into a global power - by the time he was left bedridden by a heart attack in 2014, it was the world's biggest maker of smartphones and memory chips.

He seldom ventured out from the high walls of his private compound in central Seoul to visit the company headquarters, earning him the nickname 'hermit king'.

Samsung is by far the biggest of the chaebols, the family-controlled conglomerates that dominate South Korea's economy.

They drove the nation's transformation from a war-ravaged ruin to the world's 12th-largest economy, but nowadays are accused of murky political ties and stifling competition - with Lee himself twice convicted of criminal offences, in one case bribing a president. 

Lee Kun-hee gets appointed as chairman of Samsung Group in 1987

Lee's far-sighted leadership style was widely credited with turning Samsung Electronics, now the group's flagship subsidiary, into one of the world's leading developers and producers of semiconductors, mobile phones and LCDs. 

Early in Lee's chairmanship, Samsung was seen as a shoddy producer of cheap, low-quality products.

'Let's change everything except our wives and kids,' he said in 1993.

The company gathered up and burnt all 150,000 mobile phones it had in stock, paving the way for the rebirth of the highly successful 'Anycall' handset.

Soon afterwards, he ordered Chinese-made products to be displayed at Samsung headquarters, saying it was important to show how China was quickly catching up.

Lee rarely spoke to the media, but was closely watched whenever he broke his long silences, often with doom-laden New Year corporate addresses.

In meetings with subordinates and occasional interviews, Lee always stressed the importance of bright minds in business.

'No matter what happens, there will be nothing to be afraid of if we have the best talent,' he once said.

'In the era of unlimited competition, winning or losing will depend upon a small number of geniuses... One genius will feed 100,000 people.' 

Lee, the third son of Samsung group founder Lee Byung-chull, had a soft spot for dogs - developed as a child in Japan where he went to school from age 11.

'My first love was my Pekingese,' Lee wrote in a collection of essays published in 1997. 'I learned then that an emotional dialogue between a man and a dog was possible.'

He was also known for his love of movies, horseriding and exotic supercars.

Lee studied at Japan's prestigious Waseda University and earned an MBA at George Washington University in the United States.

At the age of 36, he became vice chairman of the group's construction and trading arm, and became group chairman nine years later, shortly after his father's death.

Lee was known for taking months-long trips to Hawaii and Japan before key business decisions, including the promotion of his own son Lee Jae-yong to vice chairman of Samsung Electronics in 2013. 

Big business and political power have often been closely linked in South Korea, and in 1996, Lee Kun-hee was convicted of bribing former president Roh Tae-woo.

While Roh was in office, Lee paid him 'a large sum of money in bribes over a long period', the court ruled, seeking favours for Samsung in the president's business policy decisions.

Lee was also found guilty of embezzlement and tax evasion in a slush fund scandal in 2008, which saw him briefly step down from the company leadership.

But suspended sentences meant he never served time in jail and he received two presidential pardons, going on to spearhead his country's successful efforts to secure the 2018 Winter Olympics.

A few years later, he fought off a lawsuit from his older brother and sister claiming they were entitled to Samsung shares worth billions of dollars.

Lee married Hong Ra-hee - whose father was a justice minister - with whom he had a son and three daughters.

After his heart attack, Lee spent his last years in medical care.

Secretly filmed footage broadcast in 2017 showed him seated in a wheelchair, while other reports said he was in a coma but did not need a ventilator.

Little was ever revealed about his condition, leaving him shrouded in mystery even in his final days.  

Reporting by AFP