Samsung Motors In Receivership - Brief Article

Automotive Industries, August, 1999 by Paul Fisher

Samsung Group has placed its fledgling car division, Samsung Motors, into court receivership after efforts to swap the firm for Daewoo Electronics failed.

Samsung Group Chairman Lee Kun-hee, who personally put his weight behind the foray into car manufacturing, promised to take "moral and social responsibility" for the collapse by donating $2.4 billion of his own shares in unlisted Samsung Life Insurance (SLI) to help pay off Samsung Motors' $3.7 billion debt.

But critics question the value of SLI's shares and accuse Lee of illegally transferring wealth to his son. To further muddy the waters, Korea's President, Kim Daejung then ordered his officials to make sure the Pusan plant was kept open. As an accommodation, Samsung has promised to set up an electronics parts plant there to provide employment.