Samsung To Differentiate From Korean Conglomerate Norms

Samsung is reeling from a corruption scandal that has put them in the crosshairs of South Korean presidential candidates, but according to reports from a recent press conference that they held, that doesn't mean that they will be restructuring in the same way that most family-owned Korean conglomerates choose to when faced with similar circumstances. Companies arranged in the way that Samsung is are commonly referred to as chaebols, and usually end up restructuring themselves into holding companies using a large number of treasury shares, company shares owned by the company themselves, and handed out to employees to denote ownership when they want to rescramble the pecking order. Not only is Samsung throwing off the typical chaebol mantle, but they are reportedly planning to cancel their treasury shares, worth some $35 billion.

It is definitely worth noting that Samsung dropped the news that they wouldn't be following the traditional chaebol structure at the same time that they announced their second best quarter ever. This puts them in a uniquely advantageous position to break free of the normal chaebol structure that has dominated the South Korean business world. On a side note, the restructuring will see Jay Lee Young, recently tried for corruption, owning only 0.6% of the company and having to build his way back to the top of the food chain. As things stand, when his father, the son of Samsung's founder, dies, Lee will face down a huge inheritance tax bill, forcing him to sell some shares to pay it. Samsung has announced that they have no plans to change this outcome.

Despite their oath to change things up, Samsung and other chaebols are still a prime investigatory target of the current top presidential candidate for South Korea. The cancellation of the treasury shares will give more voting power to shareholders, and make it harder for family members inside the company to force control through ownership. Investors were reportedly quite happy with the sudden shift in the balance of power between those inside and outside of Samsung, and the fundamental changes to the way that Samsung approaches business decisions as a result could help them to stay out of regulatory crosshairs.

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Daniel Fuller

Senior Staff Writer
Daniel has been writing for Android Headlines since 2015, and is one of the site's Senior Staff Writers. He's been living the Android life since 2010, and has been interested in technology of all sorts since childhood. His personal, educational and professional backgrounds in computer science, gaming, literature, and music leave him uniquely equipped to handle a wide range of news topics for the site. These include the likes of machine learning, voice assistants, AI technology development, and hot gaming news in the Android world. Contact him at [email protected]
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