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William Pesek

Samsung's Ruling Family Tightens Its Grip

Korea's biggest company flouts calls for reform.
Family heirloom.

Family heirloom.

Photographer: Brent Lewin/Getty Images

A cornerstone of President Park Geun Hye's drive to make South Korea more innovative is reining in the family-owned conglomerates, or chaebol, that have towered over the national economy. Unfortunately, the biggest one seems not to have gotten the memo.

Samsung heir apparent Lee Jae Yong is tightening his family's control over an empire that generates the equivalent of 25 percent of Korean gross domestic product. With family patriarch Lee Kun Hee still recuperating from the heart attack he suffered a year ago, the younger Lee has been making acquisitions, meeting with leaders from China’s Xi Jinping to Apple’s Tim Cook, and replacing his dad as "chairman" of two charitable foundations (the first time he's taken the title within the Samsung universe). The latest turn of the vise was a $9.4 billion purchase of the construction subsidiary Samsung C&T by Cheil Industries, the family's de facto holding company, which counts Lee as the largest shareholder.