More Than $10.8 bln inheritance tax to be paid by Samsung Lee’s family.
The family of late Samsung Electronics Co Ltd Chairman Lee Kun-Hee said they have to pay almost 12 trillion won ($10.8 billion) in inheritance tax. They also intend to donate his massive art collection to state collectors.
Lee is responsible for making Samsung into the world’s biggest smartphone and memory chip creator and has assets worth 26 trillion won approximately. He died on Oct 25th. Globally and in South Korea, this inheritance tax bill is under scrutiny as a way to try and dilute his family’s controlling stake in the company.
The family’s inheritance tax bill is supposed to be paid in a 5-year installment plan beginning this month. “ We consider it to be our civic responsibility to clear all our taxes.”
After the statement Samsung C&T Corp (028260.KS) – the Samsung conglomerate’s de facto holding company’s shares dropped as low as 5.5%, which didn’t clarify how Lee’s shares will be sold or distributed, neither specifics on how the family plans to fund the installments.
“As there were no details mentioned about how the stakes will be divided, there was an overall disappointment by the general investor.” Shared Lee Sang-Hun at HI Investment & Securities analyst. To find the changes in shareholding, investors will have to be patient until the regulatory filings are done by Lee’s son, family members, and Samsung Electronics vice chairman Jay Y.
The family discussed using shares in affiliated companies as collateral for personal loans to pay part of the tax bill to avoid selling Samsung holdings, Reuters reported last week.
The family is apparently going to pay using their and Lee’s shares and dividends to pay the taxes. Lee’s shareholding, by value, constitutes 4.18% of Samsung Electronics, 0.08% of Samsung Electronics preferred shares, 20.76% of Samsung Life Insurance Co Ltd (032830.KS), 2.88% of Samsung C&T, and 0.01% of Samsung SDS Co Ltd (018260.KS).
Jay Y. Lee is the biggest shareholder of Samsung C&T, with a 17.33% stake.
The heir is right now midway through a 30-month jail sentence for bribery and other crimes. The presidential Blue House on Tuesday canceled calls from business lobby groups for forgiveness.