Interesting story emerged out of Korea this weekend, with Samsung officials letting reporters get wind of a failed $3.8 billion deal with Apple.
The proposed venture, according to Reuters, was meant to be a joint investment to make flash chips. That makes perfect sense for Steve Jobs and co, since they're already buying something like 40% of Samsung's flash memory... But Apple pulled out.
"We had had some talks with Apple earlier this year but it did not work out due to differences over terms," said the Samsung spokesman by telephone, adding they had dropped the joint investment talks "at a very early stage."
Some are taking this as Samsung coming out punching against Apple for leaving it in the lurch. But I suspect that this is actually a story about South Korean politics, which isn't quite as sexy. After all, Samsung is not having a great time of it on the home front. As this LA Times story documents, the relationship between government and one of its biggest businesses is testier than ever.
Samsung Group's reclusive chairman, 58-year-old Lee Kun Hee, South Korea's richest man, with an estimated fortune of $4 billion, has come under fire, accused of running the corporation like a feudal lord. Civic groups comprising scores of lawyers, professors and accountants have mobilized and filed lawsuits to push Samsung to operate more transparently and give minority shareholders a greater say in the company's affairs.
Government officials called for an investigation of Samsung's campaign activities after revelations in July that company representatives paid more than $10 million in bribes to candidates in South Korea's 1997 presidential elections.
The scandal led to the resignation of South Korea's ambassador to the United States, Hong Seok Hyun, Lee's brother-in-law and a former newspaper publisher who is said to have delivered bags of cash personally to at least one candidate.
That's one way to try and take on your rivals in government: tell them - and the Korean public - that they just lost out on $4bn. Samsung bods are laying down their hand: jobs and money are at stake and that pesky stuff about bribes is getting in the way.
