Lee Kun-hee, who transformed Samsung into a global electronics titan, dies at 78

Chaebol's second CEO once set a bonfire of dud fax machines to teach the company a lesson in quality control

Lee Kun-hee, who transformed Samsung from a small trading business into a global electronics titan, has died at the age of 78.

Samsung said Lee died on Sunday surrounded by his family. Lee suffered a heart attack that left him incapacitated in 2014. Samsung did not mention the cause of death.

"All of us at Samsung will cherish his memory and are grateful for the journey we shared with him," the firm said in a statement.

Lee was the son of Samsung’s founder, Lee Byung-chul. He joined the firm in 1968 and took over as chairman in 1987 after his father’s death. Under his leadership, Samsung grew to become the world’s largest producer of televisions, smartphones, and memory chips. The company now has a sprawling empire that offers everything from shipbuilding to life insurance to roller coaster rides.

He drove innovation through his now famous credo that the firm’s employees must “change everything except your wife and children.” He demonstrated his new stance on high-quality products by ordering that almost $50m worth of defective handsets and fax machines be set on fire because they were low-quality. The bonfire was watched by 2,000 Samsung employees who wore headbands reading “quality first”.

Lee was twice convicted of criminal offences, once for bribing South Korea’s former president Roh Tae-woo and on another occasion for tax evasion. In both cases, he received a presidential pardon in what was widely interpreted as a political act consistent with the cozy relationship between South Korea’s family-run conglomerates – known as chaebol – and the country’s government.

Lee’s death raises questions about Samsung's future leadership. His son, Lee Jae-yong, has been Samsung's de facto leader since his father’s hospitalisation since 2014. While he is widely expected to take over his father’s role, the younger Lee spent 18 months in prison after being convicted of bribery and currently awaits a final ruling on the case. He is also the subject of a secondary legal battle on charges of financial fraud. ®