Samsung Electronics Chairman Lee Kun-hee responds to a question from a reporter after touring the Samsung booth at the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada January 12, 2012. Picture taken January 12, 2012.

SEOUL: A family feud at Samsung Group, parent of the world’s largest electronics company by revenue, could upset the smooth handover of control of a smartphones-to-ships conglomerate whose $234 billion annual sales are bigger than the economy of Singapore.

Lee Kun-hee, South Korea’s richest man and chairman of Samsung Electronics (005930.KS), on Wednesday defends three lawsuits from his elder brother, Lee Maeng-hee, a sister and another relative, who claim $1 billion of assets – mainly shares in Samsung Life (032830.KS), an insurance company at the heart of a web of Samsung Group cross-shareholdings. Lee Kun-hee is unlikely to attend the case at the Seoul Central District Court.

There’s little chance of Lee losing control of Samsung, but the legal wrangling over a small part of the Samsung fortune – a day after the enthusiastic launch of Samsung’s latest Galaxy S3 smartphone – may dent plans to eventually hand over the reins to his only son, Jay Lee.

The hearing may also shed more light on how the Lee family maintains its grip on a sprawling group, some details of which emerged in a 2008 lawsuit when Kun-hee was found guilty of financial wrongdoing and tax evasion that eventually led to the current suit.

“It’s generally not in one’s favor to bet against the House of Samsung and the chairman for domestic legal issues – where such influence often transcends economic borders into legal ones,” said Jasper Kim, a professor of international business law and finance at Ewha University’s graduate school.

In an unusually public spat at the top of one of the country’s famed chaebol – the family-owned industrial groups that wield huge economic and political clout – Maeng-hee, who is in his 80s, has called his younger septuagenarian brother “greedy” and “childish”. Kun-hee retorts that Maeng-hee was turfed out of the family and not judged fit to lead Samsung by their father Lee Byung-chull, who founded the group in 1938.

Ever Everland

The Samsung Group is effectively controlled by Samsung Everland, a small zoo and theme park company with equity capital of just $10.7 million.

If Kun-hee’s stake in Samsung Life falls below Everland’s, under South Korean law Everland would be considered a financial holding company, requiring it and companies under its control to sell stakes in non-financial companies, including Samsung Electronics.

Maeng-hee, the eldest son of Samsung’s founder, and his sister are seeking a quarter of Kun-hee’s stake in Samsung Life. Kun-hee is the biggest shareholder of Samsung Life, with a 20.76 percent stake, followed by Everland with 19.34 percent. As part of the web of cross-holdings, Samsung Life owns 7.21 percent of Samsung Electronics, which owns 35.29 percent of Samsung Card (029780.KS), which holds 8.64 percent of Everland.

“Lee (Kun-hee) would prefer to settle in cash because losing some of his stake in Samsung Life could spark a bigger ownership restructuring in key Samsung companies,” said Jun Yong-ki, an analyst at Hyundai Securities.

Buying more Samsung Life shares would be an expensive option for Kun-hee and Jay Lee. It would be simpler, and cheaper, to have Everland sell its Samsung Life stake to other group entities so the family remains the top shareholder of Samsung Life, maintaining their ownership structure, analysts say.

Samsung declined to comment on the litigation, which is a personal, civil case. Kun-hee has hired three of the country’s biggest law firms to defend him.

Family Friction

Lee Maeng-hee was chosen to lead Samsung in 1967 when his father retired, but his aggressive management style caused friction with the founder’s confidants, according to several books about Samsung. Ties were finally severed after a coup by the founder’s second son, Chang-hee, who told the presidential office his father had a $1 million slush fund overseas. Lee Byung-chull believed his eldest son was also involved in the plot to discredit him. He exiled Chang-hee to the United States, and returned as chairman himself. In 1976, when diagnosed with cancer, he decided Kun-hee should take over the business. Chang-hee died in 1991.

In a recent book on Maeng-hee, “Prince Sado of Samsung”, Lee Yong-u, no relation, wrote that Maeng-hee failed in his succession bid due to a conspiracy by the founder’s inner circle, which included Kun-hee’s father-in-law.

“My brother (Maeng-hee) had his own personality and the chairman had in his mind his successor should have a certain set of qualifications. I was able to become his successor partly because I am his son, but if I didn’t have the qualifications he had in his mind, I wouldn’t be able to make it,” Kun-hee was quoted as saying in a 2010 book, “The Lee Kun-hee story”.

Public Anger

As and when Jay Lee takes over, there is likely to be closer public scrutiny amid growing anger over chaebols’ dominance in an economy where wealth gaps are widening.

“It’s not clear whether the share transfer scheme to Jay Lee will be clawed back by the courts at this point, from a legal purview,” said Ewha’s Kim.

Jay Lee, 43, has yet to make any significant mark on the business, beyond a failed e-commerce venture during the dotcom bubble. Critics say he lacks his father’s charisma, business insight and entrepreneurship. The snappily dressed and bespectacled Lee has a degree in East Asian history from Seoul National University, an MBA from Keio University in Japan and also attended the doctoral program at Harvard Business School. He has two children and went through one of Korea’s highest profile divorce cases.

The Lee family has long been under attack by activist shareholders over its obscure share dealings.

“Right now, the reason why Korean stocks tend to sell at a discount is because of this problem (of limiting the say of minority shareholders). I’d say that’s the single most important factor,” said Mark Mobius, executive chairman of Templeton Emerging Markets Group.

Longer term, there is a risk that a focus on keeping it in the family may damage Samsung Group.

“The current Samsung Group transfer of power dynamics resembles the Roman Empire at or near its peak,” said Ewha’s Kim.

“What history has shown us is that what brought down the Pax Romana dynasty was over-expansion and over-spending. In this sense, history could very well repeat itself with the iconic Samsung corporate dynasty – its areas are simply too stretched and its resources spent too far away from its traditional areas of core competencies.”

Apple CEO Tim Cook is pictured at the All Things Digital conference in Los Angeles in this May 29, 2012 handout photo.   — Photo by Reuters

RANCHO PALOS VERDES:Apple chief Tim Cook on Tuesday vowed that creativity would remain in the company’s “DNA” and hinted that products on the horizon could come in the area of television.

Cook was the star opening guest at a prestigious All Things Digital conference hosted by the Rupert Murdoch-owned technology news website at a resort in the Southern California town of Palos Verdes.

“We’re going to introduce some great stuff,” Cook said. “I think you are going to love it.” Cook declined to reveal details of products set for release by the Cupertino, California-based maker of iPads, iPhones, iPods, Macintosh computers, and Apple TV devices.

The first unveiling could take place as soon as June 11, when Apple kicks off its annual Worldwide Developers Conference in San Francisco.

“Juices are flowing and we have some incredible things coming out,” Cook said. “For years Apple’s been focused on innovation, and this will not change.” While avoiding specifics, Cook said that the Apple TV business is “an area of intense interest for us.”

Apple has long referred to Apple TV, boxes that route content from the Internet to television screens, as a hobby.

“We’re not a hobby kind of company, as you know,” Cook said. “The company tends to put a lot of wood behind a few arrows. We’ve stuck to this.”Apple sold 2.8 million Apple TV devices last year and nearly that many in the first few months of this year, according to Cook.

Apple’s nascent iCloud online data storage service and close relationships with film and television studios that sell digital content for viewing on its gadgets could support a new Apple TV offering.

Last month, Jefferies & Company analyst Peter Misek noted that the improved outlook of display-related companies might be due in part to early “iTV”production.

Cook spoke of lessons learned from late Apple co-founder Steve Jobs, who turned the helm over to Cook in August of last year after becoming too ill to continue, and of finding his own stride out of his predecessor’s shadow.

“I learned a lot from Steve,” 51-year-old Cook said during an interview with All Things Digital writers Kara Swisher and Walter Mossberg.
“It was the saddest day of my life when he passed away,” he said. “But at some point last year somebody kind of shook me and said it’s time to get on. The sadness was replaced by this determination to continue the journey.”

Lessons learned from Jobs included focusing on doing a few things exceptionally well, shunning mediocrity, and casting the rest aside, according to Cook.

“He also taught me that the joy is in the journey,” Cook said.

Cook recalled going to Jobs’s home to discuss taking over as Apple chief, saying Jobs talked about how Disney had floundered after its legendary founder died and decisions were made based on what Walt Disney would have done.

“So he looked at me with these intense eyes and he asked me to never do that, just do what is right,” Cook said.

Under Cook’s watch, Apple has implemented a philanthropic program matching donations made my employees and embarked on a campaign to improve working conditions at plants in China where its gadgets are made.

When asked who he looked up to, Cook said that the list included Robert Kennedy and Martin Luther King along with Disney chief executive Robert Iger, who is on the Apple board of directors.

In an indirect swipe at Microsoft’s touting of its next generation Windows operating system as being designed to work on all kinds of devices, Cook said software can’t power tablets and personal computers without sacrifices.

“You’re not building the best products when you try to converge,” Cook said. “If you force them together I think the PC is not as good as it could be and the tablet is not as good as it could be.”

Cook said Apple is “micromanaging” its contractors in China to improve working conditions and curb excessive overtime, which has been “tricky” since there are employees who want to rack up lots of hours to make extra money.

He referred to patent wars being waged by Apple and other technology firms as an annoyance but maintained that Apple was rightfully defending its creations.

“Apple can’t take all of our energy and all of our care and finish a painting and have someone else put their name on it,” Cook said.

He added that the notoriously tight-lipped company was going to “double-down” on product secrecy.

 Correspondence through emails and phone calls with the team Bodhicitta Works, we found out that “Kolachi” was only a trailer packaged and completed by them to showcase it to the production companies and since the script and the whole vision needed a large-scale kind of production, the team decided to wait to get to the right time to do it without any equivocation.

However, what we also found out was that the team has been working on a feature length film, known as “Seedlings – Lamha” which is finalised and ready to hit the theatres soon. Dawn.com met up with the team Mansoor Mujahid – the director, Summer Nicks – writer and producer and Meher Jaffri – producer, to know about their exciting  journey of making “Seedlings – Lamha“.

The Department stars Amitabh Bachchan, Sanjay Dutt, and Rana Duggabati. — Courtesy Photo

In”Department”, the new underworld action drama, directed by Ram Gopal Verma, most of the “sound” aesthetic calls are wiggled free out of the film between the chronic whipping pans the director calls out for.

And unfortunately, the whipping pans are just the tip of a wayward iceberg. In almost every other framing between scenes, the camera narrows its focus and latches onto objects. Angular close up faces, arms, ear lobes, bottom of coffee cups, and in a vertigo inducing flinging of a Canon 5D (the movie was shot in multiple DSLRs) the camera plays the role of a ball hurled around by children. This nauseating use of cinematic free-speech is a testament of RGV’s technical directorial prowess gone rogue.

Spasmodically cut, badly lit, its highlights overblowing, “Department” is an unrelenting jackhammer on the senses. And then there’s the plot: Mahadev (Sanjay Dutt) recruits a recently suspended cop Shiv Narayan (Rana Daggubati – angry-for-no-reason, as best I can guess from his fixed expression) into his lawless, law-enforcing encounter unit.

Cowboys they ain’t, but the Wild West they know. Criminal bodies are riddled amidst personal agendas, and one sees the conclusion forcing itself out of the bad narrative.

That is, until Amitabh Bachchan’s Sarjerao Gaikwad attaches himself to the picture. Once a criminal, Gaikwad is now home minister, and Department’s lonesome bestowed grace; his presence brings a spark of familiarity to an alien product, and so when he laughs at a “personal” joke (which I guess is a homage of one of his many drunkard scenes), one cannot help but be swayed by his likability.

“Department” is one of RGV’s often inclined criminal-world fetishes, and when AB influences the young tyke and the movie turns a miraculous save — if one can champion the blitzkrieg that long.

A Blackberry handset is displayed in Washington. — Reuters Photo

NEW YORK: BlackBerry maker Research In Motion warned Tuesday it could report a loss in the current quarter and said it had hired investment firms to study its strategic options.

The move comes with the BlackBerry, which pioneered the smartphone, rapidly losing market share to Apple’s iPhones and devices powered by Google’s Android operating system.

Chief executive Thorsten Heins said RIM “is going through a significant transformation” as it moved towards the launch later this year of the BlackBerry 10, the new platform aimed at competing with Apple and Google.

As a result, “our financial performance will continue to be challenging for the next few quarters,” he said.

“The ongoing competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our first quarter results to reflect this, and likely result in an operating loss for the quarter,” Heins said.

JP Morgan Securities and RBC Capital Markets were retained to advise the company in a “strategic review,” which could mean a sale, alliance or other reorganization of the business.

They will “evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives,” the company said in a statement.

The company’s shares plunged more than 10 percent in after-hours trade following the announcement, after ending normal trading hours up 2.1 percent at $11.23.

Waterloo, Ontario-based RIM posted a net loss of $125 million for its fiscal fourth quarter to March 3, compared with a profit of $418 million a year earlier, with revenues down 25 per cent.

The tough environment is a challenge for Heins, who was named president and CEO after the resignation of Jim Balsillie and co-CEO Mike Lazaridis following months of investor pressure for a change.

Some reports said RIM will shed more jobs and taking additional writeoffs as it prepares for the new platform launch.

Ramon Llamas of the research firm IDC said RIM’s latest is “not unexpected”and that the company desperately needs to reinvent itself to compete in the market.

“People look at the BlackBerry and say it’s a workhorse, it’s utilitarian,”he said. “But they don’t say it’s sexy.””RIM has not been able to entertain and delight users, hence the massive defections,” he added.

He said the full details of the BlackBerry 10 are not yet known, but that “this is what the company is betting on to recapture market share and win back customers, which is not an easy thing to do.”Heins, who joined RIM from German industrial giant Siemens in 2007 and served as senior vice president for hardware engineering and later as chief operating officer, said the firm is “continuing to be aggressive as we compete for our customers’ business – both enterprise and consumer – around the world.”

An investor sleeps on a bench in front of an electronic board showing stock information at a brokerage house in Taiyuan, Shanxi province in China. Regional markets, particularly Hong Kong and Shanghai, also slipped after an editorial by China’s state run Xinhua news agency saying Beijing would not embark on a stimulus drive like that seen during the 2008 financial crisis. – Reuters photo

HONG KONG: Asian markets sank Wednesday on growing concerns that Spain could be forced into seeking a bailout while China dashed previous hopes it will introduce fresh stimulus measures to boost its economy.

The euro also set new two-year lows against the dollar as attention turned away from positive news from Greece at the weekend that had provided some lift earlier this week.

Tokyo fell 0.28 per cent, or 23.89 points, to 8,633.19, Seoul was 0.27 per cent, or 5.05 points, lower at 1,844.86 and Sydney shed 0.49 per cent, or 20.2 points, to 4,092.2.

In the afternoon Hong Kong tumbled 1.95 per cent and Shanghai slipped 0.26 per cent.

The losses reversed two days of gains after opinion polls in Greece on Sunday pointed to a victory for the pro-austerity conservatives in June 17 elections, easing concerns the country could end up leaving the euro bloc.

But Madrid’s economic woes are now in focus as its borrowing rates approached the 7.0 per cent mark considered unsustainable for governments to service their debts.

Economists fear that if yields stay so high the government will have to seek an international bailout — following Greece, Ireland and Portugal — despite assurances from Prime Minister Mariano Rajoy that it would not need to.

Adding to traders’ woes was a European Central Bank warning that it would oppose any plan by Spain to tap its lending facilities in order to recapitalise the country’s ailing Bankia, which has asked for $24 billion in state aid.

Spain already this month paid $5.6 billion to the lender to take it into government control and the latest plea from its board comes as the nation’s own finances are stretched to breaking point.

While officials say they are only considering the ECB as a last resort, the Frankfurt-based bank’s governing council is set against it, the Wall Street Journal said.

“There is this ongoing concern about the Spanish banking system and what kind of bailout it could need,” Tim Waterer, senior trader at CMC Markets in Sydney, told Dow Jones Newswires.

Spain’s woes weighed on the single currency, which in early trade fell to $1.2458 — another low not seen since July 2010.

The troubled unit bought $1.2467 and 99.08 yen in Tokyo in the afternoon, down from $1.2503 and 99.39 yen in New York on Tuesday.

The dollar was stable at 79.46 yen, compared with 79.49 yen.

Regional markets, particularly Hong Kong and Shanghai, also slipped after an editorial by China’s state run Xinhua news agency saying Beijing would not embark on a stimulus drive like that seen during the 2008 financial crisis.

The news countered a Tuesday report in the state-run Shanghai Securities News that measures would be introduced to jumpstart demand for automobiles, fuelling hopes for similar moves in other sectors.

Traders were unmoved by a Wall Street rally that saw the Dow up 1.01 per cent, the S&P 500 gain 1.11 per cent and the Nasdaq climb 1.18 per cent.

On oil markets New York’s main contract, West Texas Intermediate crude for delivery in July was down 42 cents to $90.34 per barrel while Brent North Sea crude for July shed 30 cents to $106.38 in the afternoon.

Gold was at $1,549.56 an ounce at 0600 GMT, compared with $1,573.60 late Tuesday.

In other markets:

– Taipei fell 1.10 per cent, or 80.49 points, to 7,261.80.

HTC shed 1.85 per cent to Tw$424.0 while TSMC was 0.73 per cent lower at Tw$81.7.

– Wellington closed flat, edging up 0.09 per cent, or 3.05 points, to 3,481.34.

Fletcher Building rose 0.16 per cent to NZ$6.26, Chorus was up 1.25 per cent at NZ$3.25 and Telecom fell 1.16 per cent to NZ$2.55.

Myanmar opposition leader Aung San Suu Kyi waves to the crowd while leaving a community center in Mahachai, Samut Sakhon Province, Thailand on Wednesday, May 30, 2012.    — Photo by AP

MAHACHAI: Kicking off her first trip abroad in nearly a quarter-century, Myanmar opposition leader Aung San Suu Kyi offered encouragement Wednesday to impoverished migrants whose flight to neighboring Thailand is emblematic of the devastation wrought on her homeland by decades of misrule.

“Don’t feel down, or weak. History is always changing,” she told an exuberant crowd of thousands southwest of Bangkok. Many held signs saying, “We want to go home,” and Suu Kyi said her visit was aimed at learning how she could help them.

“Today, I will make you one promise: I will try my best for you,” she said.

Suu Kyi, who arrived in Bangkok late Tuesday, left her luxury hotel and the skyscraper-packed capital Wednesday for the nearby town of Mahachai, home to Thailand’s largest population of Burmese migrants. Thousands of Myanmar’s downtrodden crowded around her and chanted: “Long Live Mother Suu!”

“I had only seen her on TV and in newspapers,” said Saw Hla Tun, who left Myanmar’s Karen state seven years ago and earns a meager wage carrying heavy salt sacks on his back. “I couldn’t hold back my tears when I saw her.”

After speaking to the crowd from a fourth-floor balcony at a community center, the Nobel Peace Prize winner met with migrant workers who told her they face mistreatment from employers but lack knowledge of their rights and have no legal means to settle disputes.

Suu Kyi spent 15 of the last 24 years under house arrest. During intermittent periods of freedom, she dared not leave Myanmar, not even to visit her dying husband, because she feared the military junta ruling at the time would not allow her to return.

Now, in a sign of how much life has changed, the democracy activist and newly elected member of Parliament is traveling across Thailand, where she will speak later this week at the World Economic Forum on East Asia.

She’ll return to Myanmar briefly before heading to Europe for a five-country tour in mid-June. Her stops include England where she’ll address the British Parliament and Oslo, Norway, to formally accept the Nobel Peace Prize she won 21 years ago.

Fixing a battered economy is one of the most crucial challenges facing Myanmar, also known as Burma, as it begins opening up in the wake of 49 years of military governance that ended only last year.

Thailand hosts around 2.5 million impoverished Burmese who have fled here to work low-skilled jobs as domestic servants or in manual labor industries like fisheries and the garment sector.

Andy Hall, a migrant expert and researcher at the Institute for Population and Social Research at Thailand’s Mahidol University, said the Burmese migrants, up to a million of them undocumented, make up between 5 and 10 per cent of the Thai work force, contributing as much as 7 per cent of the nation’s GDP.

Many are exploited and paid reduced wages. Some have been trafficked; some have had their passports confiscated by employers. Hall said they were nevertheless “the lifeblood of a lot of the Myanmar economy, sending home money to support families who don’t have enough money to eat.”

“They have no voice, they can never speak up or stand up,” Hall said. “So for Aung San Suu Kyi to visit is like a dream come true, someone who finally may be able to bring attention to their suffering.”

One of the migrants, a 26-year-old woman named Khin Than Nu, works at a Thai canning factory and dreams of her home in Myanmar’s Mon state.

“We left our parents in Burma, and all my brothers and sisters work here to support our parents,” she said. “I hope Daw Suu will help develop our country, and bring jobs so we can go home.”

Dealers are taking a wait-and-see stance on dollar-yen trade ahead of key US economic data later this week, including the jobs report for May on Friday, analysts said. – Reuters photo

TOKYO: The euro continued its downward slide in Asian trade on Wednesday afternoon as fears over Europe resurfaced after Spanish borrowing rates shot up close to danger levels.

The single unit bought $1.2467 and 99.05 yen, down from $1.2503 and 99.39 yen in New York Tuesday, and hovering near two-year lows against the dollar.

“We may see the pair bounce back slightly after overnight falls, but conditions are not right for continued buying of the single currency as there are plenty of euro-negative factors,” said Kengo Suzuki, currency strategist at Mizuho Securities.

Spanish banks are at the heart of the renewed crisis, with Madrid forced to step in and save distressed lender Bankia from bad mortgage bets.

That has only added to the weight of debt the Spanish state must bear.

Investors will be paying close attention to remarks by European Central Bank President Mario Draghi later in the day, with the Wall Street Journal reporting that the ECB would oppose a Bankia bailout.

“We will look for whether he hints at the possibility of the ECB taking further liquidity provision or easing actions,” added Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo.

“It’s unlikely he will, so the euro is set to fall further,” he told Dow Jones Newswires.

Meanwhile, the dollar was little changed at 79.44 yen in afternoon trade.

Dealers are taking a wait-and-see stance on dollar-yen trade ahead of key US economic data later this week, including the jobs report for May on Friday, analysts said.

Barclays chief currency strategist Masafumi Yamamoto said the dollar could be supported if the New York Federal Reserve Bank’s president William Dudley later in the day makes negative remarks about the need for additional easing.

The dollar was mixed against other Asian currencies.

The greenback weakened to 1,177.40 South Korean won from 1,178.65 won on Tuesday, and to 43.50 Philippine pesos from 43.64 pesos.

But it firmed to 31.79 Thai baht from 31.69 baht, to Tw$29.69 from Tw$29.61, to Sg$1.2797 from Sg$1.2780 and to 9,630.00 Indonesian rupiah from 9,568.00 rupiah.

Republican Presidential candidate Mitt Romney. – Photo by AP

WASHINGTON: Mitt Romney has clinched his Republican party’s White House nomination by winning its Texas primary, vowing to get America “back on the path to prosperity” by defeating Barack Obama in November.

“I am honored that Americans across the country have given their support to my candidacy and I am humbled to have won enough delegates to become the Republican Party’s 2012 presidential nominee,” Romney said.

“I have no illusions about the difficulties of the task before us. But whatever challenges lie ahead, we will settle for nothing less than getting America back on the path to full employment and prosperity.”

Romney, the only candidate who actively campaigned in Texas, won 69 per cent of the vote, against 12 per cent for Ron Paul, 8 per cent for Rick Santorum and 5 per cent for Newt Gingrich, according to CNN, with 99 per cent of votes counted.

Texas, the second most populous US state, had 155 delegates up for grabs which — added to former Massachusetts governor’s tally of 1,064 — takes him well over the nomination threshold of 1,144 delegates.

Romney, 65, pivoted toward Obama in his campaign speeches and events more than a month ago, when it became clear his long march toward the nomination at the party convention in August would not be stopped.

But that was only after a bruising primary race, in which rivals like Gingrich and Santorum slowed Romney’s rise by rallying more conservative voters and highlighting his flipflops on issues such as abortion.

Poll aggregates show Obama narrowly ahead. The latest RealClearPolitics average shows the president with a two-point lead, 45.6 to 43.6 per cent.