[Lee Jae-hoon's X-File Ep. 10] The Light and Shadow of CJ Group Chairman Lee Jae-hyun, the 'Culture President'

[CEONEWS=Lee Jae-hoon, Reporter] Few figures in South Korea's business world possess such 'extreme opposite' images simultaneously as CJ Group Chairman Lee Jae-hyun. He is the 'Culture President' who, after shedding the title of 'Samsung's first grandson,' transformed a 'sugar and flour' company into a lifestyle empire propagating 'K-Culture.' Yet, he is also an icon of tragedy, battling a hereditary illness and having faced imprisonment.

Just as he was recovering his health and sprinting towards the 'Great CJ 2025' vision, an entirely unexpected reef was discovered. What 'Lee Jae-hoon's X-File' has tracked this time is the so-called 'secret DJ party' incident that broke on September 26. This incident is more than just a simple personal deviation by the owner; it is a symbolic 'trigger' showing how the 'CEO PI (Personal Identity)' that Chairman Lee Jae-hyun spent his entire life building is collapsing, and how this collapse is creating fatal cracks in the massive empire of CJ. Episode 10 of X-File intensively analyzes the light and shadow of CJ's success, the essence of 'Lee Jae-hyun's leadership,' and the negative effects that the collapse of his PI will bring.

■ The Success Story of 'Building a Nation on Culture': From 'Sugar' to 'K-Content'

Chairman Lee Jae-hyun's success story is a history of 'deprivation' and 'proving oneself.' Though he was the first grandson of the late Samsung founder Lee Byung-chull, he was pushed out of the management succession line and spun off from Samsung in 1993, taking Cheil Jedang (now CJ) with him. All he was given was the food (sugar, flour) and bio divisions.

However, he saw 'culture' in 'food.' His $300 million investment in Steven Spielberg's 'DreamWorks' in 1995 was the beginning of a legend. Everyone mocked it as reckless, but it was his declaration that he would "turn culture into an industry."

After that, his moves were unstoppable. He acquired the music broadcaster Mnet (then Music Network) in 1996 and opened Korea's first multiplex theater, CGV, in 1998. In the 2000s, he vertically integrated content production capabilities by acquiring OnMedia (now tvN).

His strategy was clear: the C-P-N-D (Contents - Platform - Network - Device) strategy. He built a 'lifestyle ecosystem' by creating content (C), distributing it on platforms (P), transporting it via logistics (N, Korea Express), and delivering it to consumers (D). No one in the business world can deny that behind the global success of 'Parasite' and 'K-Pop' lies this 'path of culture' that CJ paved for 20 years.

■ The 'Super-Gap M&A' Strategy: Speed or Poison?

Chairman Lee's success was backed by 'aggressive M&A.' His M&A was not a simple 'octopus-like expansion'; it was more akin to 'fitting puzzle pieces' to complete the C-P-N-D ecosystem.

A prime example is the 1.9 trillion won acquisition of 'Korea Express' (now CJ Logistics) in 2011. Criticisms poured in, questioning why a content company was buying a logistics firm, but it turned out to be a divine move. He predicted the advent of the e-commerce era and secured the 'arteries' for the group's food, distribution, and media commerce.

Furthermore, the 2018 acquisition of the American frozen food company 'Schwan's' for about 2 trillion won is serving effectively as a global outpost for 'K-Food.' Schwan's distribution network was decisive in the 'Bibigo' dumplings' conquest of the US market.

However, this 'speed battle' (blitz) left behind the shadow of a massive financial burden. The accumulated acquisition costs and debts, approaching 20 trillion won, became shackles holding CJ back. This is also why he declared 'emergency management' and began selling off assets. For CJ, M&A has been a double-edged sword: an 'engine of growth' and, simultaneously, a 'detonator of risk.'

■ 'OnlyOne' Leadership and the 'Emperor's' Shadow

Chairman Lee's management philosophy is summarized as 'OnlyOne.' It is a directive to become 'irreplaceable'—not just number one—through being the 'First, Best, and Differentiated.' This became CJ's DNA.

His leadership is symbolized by 'detail' and 'instinct.' He is famous as a 'micro-manager' who personally reviews all film scenarios for 'CJ E&M' and even checks the thickness of 'Bibigo' dumpling skins. The success of K-Culture was possible because his instincts as a 'cultural connoisseur' and owner hit the mark.

The problem arises when this 'OnlyOne' leadership degenerates into 'emperor management.' A system that relies on the judgment and 'instinct' of a single owner can plunge the entire group into crisis when that 'instinct' dulls or 'judgment' falters.

A bigger problem is the 'succession structure.' Linked with his health issues, the succession process is ongoing. His eldest daughter, Lee Kyung-hoo (Head of Brand Strategy at CJ ENM), and eldest son, Lee Sun-ho (Management Leader at CJ CheilJedang), are receiving management training in the media and food sectors, respectively. However, his son, Lee Sun-ho, carries the fatal Achilles' heel of a past drug smuggling incident. At a time when 'morality' has become a key criterion for succession, whether it's a 'sibling management' structure or a 'primogeniture' structure, it is a setup that is difficult to complete without Chairman Lee's absolute leadership.

■ The '9.26 DJ Party' and the Collapse of CEO PI

At the very moment when all this success and an unstable future intersect, the '9.26 DJ Party' incident occurred. According to an exclusive report by Dispatch, on the night of September 26, Chairman Lee hosted a large-scale private DJ party at a venue in Gangnam, inviting a small number of acquaintances and celebrities. The problem is the timing, the location, and the content.

This incident is particularly fatal because it directly betrayed the CEO PI that Chairman Lee Jae-hyun himself had built.

First, it's a fall from 'Culture President' to 'King of Nightlife.' The CEO PI he built was that of a 'pioneer' and 'creative leader' who cultivated the 'K-Culture' industry. However, this party was perceived by the public not as 'K-Culture,' but as 'luxury and amusement' in 'their own exclusive league.' This damages the essence of CJ's business, which targets the public.

Second, it's a betrayal of his 'frail chairman' image. He had long received public sympathy while battling a hereditary illness (CMT). He even received a stay of execution on his prison sentence due to health issues. However, as it became known that he was healthy enough to host a vigorous DJ party in the middle of the night, the past 'sympathy' has turned into criticism of 'moral hazard' and 'deception.'

Third, it's the fracturing of 'OnlyOne' leadership. While demanding that employees "tighten their belts" by striving for 'super-gap' and 'the best,' the chairman himself committed a deviation, failing to read the social atmosphere. This dampens the entire group's morale and reduces the 'OnlyOne' slogan itself to an empty echo.

Finally, the collapse of CEO PI is a group crisis. This '9.26 DJ Party' incident is not mere gossip. It is a 'litmus test' showing just how much the CJ Group has relied on Lee Jae-hyun as its 'Absolute Ring,' and how great the risk is to the entire group when that ring loses its luster. The succession plan is incomplete, and the morality risk of his eldest son persists. In this situation, the PI of Chairman Lee Jae-hyun himself—who should be acting as the group's 'final bastion' and 'central pillar'—is collapsing.

In the past, Chairman Lee said, "There is no sin in culture." But now, the public is asking, "Is the leader who guides culture without sin?"

Chairman Lee Jae-hyun built an empire with 'culture,' but he is putting the entire empire at risk with a 'corrupted culture.' It is the moment when it has been revealed that his leadership, which cried 'OnlyOne,' was 'Zero' when it came to earning social consensus. CJ's real crisis, perhaps, is not starting from its financial statements, but from the chairman's 'party.'