The chairman of Samsung Electronics has kept his fortune and control of the Samsung conglomerate after a South Korean court yesterday ruled against his older brother in an inheritance battle.
The case was watched because a ruling against Samsung chairman Lee Kun-hee could have resulted in the unravelling of a cross-shareholding structure that allows Lee, who is South Korea's richest person, to control the conglomerate as a minority shareholder.
The high-stakes fight also highlighted a deep discord between the two sons of Samsung founder Lee Byung-chull, who denounced each other in public as the battle unfolded last year.
Lee Kun-hee's brother, Lee Meng-hee, wanted a bigger share of the Samsung cake, but the court ruled that a 10-year period for inheritance claims had expired. It also said there was not enough evidence to prove dividends from Samsung companies were intended as part of the inheritance from Lee Byung-chull.
Lee Meng-hee's lawyers said they might appeal.
Before announcing the ruling, the judge said he wished the brothers would reconcile and live in harmony.
Lee Kun-hee, 71, and Samsung Everland, a de facto holding company for the country's largest conglomerate, were defending three lawsuits by Lee Meng-hee and other estranged relatives seeking US$4 billion in assets in Samsung Life Insurance, which sits at the heart of Samsung group shareholdings, and Samsung Electronics, the group's crown jewel.
Seoul's Central District Court ruled that Lee Kun-hee could retain more than US$1 billion in Samsung Electronics shares and another US$1 billion in shares of Samsung Life. Samsung Everland, a small zoo operator, was also allowed to keep its US$1 billion stake in Samsung Life. Lee Kun-hee will remain Samsung Life's biggest shareholder with a 20.76 per cent stake.
The lawsuits accused Lee of hiding from his siblings billions of dollars in shareholdings inherited from his father, while Lee countered that as his father's chosen successor, he had free rein to transfer group company shares.
Lee Kun-hee owns less than 4 per cent of Samsung Electronics, but exercises substantial control over the firm and the 80 or so Samsung companies through family stakes in Samsung Everland and Samsung Life.
The ruling came at a key juncture for the electronics giant's successions plans, just months after Lee's son Jay Y. Lee, 44, was promoted to vice-chairman.
Associated Press, Reuters