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Samsung's testing times

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By John Burton

It is somewhat ironic that Lee Jae-yong, the de facto head of the Samsung group, has borne the brunt of populist public anger against the family-run conglomerates, or chaebol, unleashed by Choigate and its exposure of alleged corrupt ties between business and government.

Since taking over leadership of the group after his father's heart attack in 2014, Lee has done more than any other chaebol boss in restructuring holdings to the benefit of shareholders. This has primarily consisted of selling off some struggling businesses while forging entry into new sectors, such as automotive electronics and biotechnology.

Several factors lie behind his actions. The first is Lee has eschewed the empire-building practices of his father. Lee Kun-hee, and has recognized that a more focused business structure – primarily in electronics and finance -- improves Samsung's competitiveness in global markets.

That also represents an acknowledgement that the industrial landscape in which Samsung has been operating is changing. Increased Chinese competition in such areas as chemicals and shipbuilding means that Korea is losing its advantages in these industries.

Finally, a looming inheritance tax bill, estimated at $6 billion, is forcing Lee to dispose of assets to help raise........

© The Korea Times