Amazon hires Trump-allied lobbyist Jeff Miller as battle for Pentagon contract heats up.Politicsread more
In a series of tweets, the president addressed an unusual controversy stemming from a speech delivered Thursday by New York Fed President John Williams.Marketsread more
Companies aren't waiting for the U.S.-China trade war to be resolved, says the head of the world's biggest money manager.Investingread more
Iran's Revolutionary Guard says it seized a British tanker in the Strait of Hormuz, claiming it failed to follow international marine regulations.World Newsread more
More than a quarter of the S&P 500 companies report earnings in the week ahead, and that could buffet the market as investors await the Fed's meeting at the end of the month.Market Insiderread more
Executives from United Airlines and American Airlines were "shocked" that state-owned airline Qatar Airways CEO Akbar Al Baker was also invited to the meeting, according to a...Airlinesread more
Walmart is making further organizational changes as it continues to integrate its store and digital operations and leadership, according to a memo obtained by CNBC that was...Retailread more
George Nader helped arrange a January 2017 meeting in the Seychelles between Erik Prince and the head of Russia's sovereign wealth fund, who reported directly to Vladimir...Politicsread more
These are the stocks posting the largest moves midday.Market Insiderread more
"I'm not hearing people blame the Fed as much as they're blaming tariffs," says CNBC's Jim Cramer.US Economyread more
Earlier, Williams said in a speech that "it's better to take preventative measures than to wait for disaster to unfold."The Fedread more
In South Korea, it's all in the family.
South Korean officials on Friday arrested Lee Jae-yong, the vice chairman of Samsung and the scion of an immensely wealthy and powerful family. Mr. Lee — known as Jay Y. Lee in the West — was accused of paying bribes to a confidante of South Korea's embattled president. Samsung has defended Mr. Lee, and it said on Friday that it would work to ensure "that the truth is revealed."
Mr. Lee has been widely considered Samsung's de facto leader since his father, Lee Kun-hee, Samsung's 75-year-old chairman, had a heart attack in 2014. That put the younger Mr. Lee at the helm of a sprawling business empire that encompasses gadgets, appliances, engineering, construction, shipbuilding, insurance and credit cards. Samsung Electronics — the maker of televisions and smartphones used around the world, including the doomed Galaxy Note 7 smartphone — by itself accounts for one-fifth of South Korea's exports.
More from New York Times:
Samsung is only one of a handful of family-controlled companies, called chaebol, that dominate economic life in South Korea. Some, like Hyundai, land Samsung, are well known outside their home country. But domestically, they all wield immense power — and are coming under increasing scrutiny.
The word comes from the combination of the characters for "rich" and "clan." It applies to large groups of interconnected companies that are usually dominated by a wealthy family. South Korea has several, but the best known outside the country are Hyundai, LG and Samsung. Others include Hanjin, Kumho, Lotte and SK Group.
Chaebol are generally conglomerates of affiliated companies. LG, for example, makes smartphones, televisions, electronic components, chemicals and fertilizer. It also owns Korean baseball and basketball teams. Hyundai, which makes the Hyundai and Kia cars that are popular in the United States and other countries, also makes elevators, provides logistics services, and runs hotels and department stores.
They rose from the ashes of the Korean War. After the conflict ended, officials steered relief funds and cheap loans to businessmen who promised to rebuild the country. The government also protected homegrown industries from foreign competition to help them develop. The recipe proved to be potent: Chaebol played a major role in South Korea's rise as an industrial giant in the following decades.
But the recipe also created imbalances, a number of economists have argued. Money meant for the common people often ended up in the hands of the wealthy families, creating resentment that lingers to this day. And government protection and crackdowns on the labor movement allowed these families to expand their business empires into new areas with little to fear from potential foreign competition or costly failures.
As a result, chaebol became sprawling businesses that held a nearly two-thirds market share in South Korean manufacturing by the end of the 1990s, according to the World Trade Organization. But there is a deep-seated belief among many South Koreans that their immense wealth was accumulated at the expense of the public. To those people, recurring chaebol scandals are particularly galling.
South Korea's recipe for growth also fostered tight ties between the government and businesses.
Take the example of Park Chung-hee, a general and the father of the current president, who took power in South Korea after a 1961 coup. He led an effort to rev up the South Korean economy — and he used many of the companies that became chaebol to do it. His government steered money to companies that chased his economic goals, such as emphasizing exports.
The dynamic shifted somewhat as South Korea transitioned to a democracy in the 1980s. By then, the chaebol had become so economically powerful that they held considerable political sway. Politicians began to rely on the companies' political and financial support to get elected.
They are. But time will tell whether it will result in change.
Public support of chaebol has gradually waned. The Asian financial crisis of the late 1990s stirred worries that the cozy relationship between chaebol member companies could lead to severe damage across multiple businesses if one failed. As the economy has matured and created a nation of consumers, an increasing number of South Koreans worry about the political power and corruption of the chaebol, with many now saying white-collar crime is a major issue.
Despite those concerns, chaebol executives are widely believed to be treated with kid gloves. The elder Mr. Lee, Samsung's chairman, has been pardoned twice after being convicted of white-collar crimes, with the potential impact to South Korea's economy given as the reason.