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 funds to pay for it.
Samsung has also been responding to outside pressure, particularly from foreign funds such as Elliott Management, which has been pushing for a more transparent group structure. Samsung has suggested, for example, that it will adopt a holding company structure to replace the current complex cross-shareholding arrangements.
Such pressure is only likely to increase. Moon Jae-in, the opposition candidate who is seen as the presidential frontrunner, has vowed to reform the chaebol. He wants to make them more "democratic" by reducing the influence of the family owners, subjecting big business to increased anti-trust policing and giving minority shareholders greater rights.
Such an agenda is likely to be approved by the National Assembly, which is now controlled by the opposition parties, if Moon is elected president.
But it should be noted that few in Korea actually want to dismantle the chaebol since there is recognition that their large production and R&D prowess gives them a competitive advantage in global markets.
Rather, the focus is on introducing a more professional style of management that is not subject to the idiosyncratic whims of family owners, while curbing the dominance of the chaebol in the domestic market in order to give smaller businesses........