Taxman/legacy
The late Lee Kun-hee, former Chairman of Samsung Group (pvt) from 1987 to 2020 (not in 2009), and the third of four sons of Samsung founder Lee Byung-chul, was a rich man. He was the wealthiest person in South Korea for a number of years, with an estate worth an estimated $21b at the time of his death, and was credited with changing Samsung from a high volume, low quality producer to one of high quality, which eventually moved the company to a leadership role in television, smartphones, and a variety of other CE related and unrelated businesses. While his Samsung stewardship was not without controversy, having been convicted of bribery and tax evasion, sentenced to seven years in prison and fined ~$312m, but was pardoned by the then President of South Korea, who stated that the intent of the pardon was to keep Lee on the International Olympics Committee, although the president of South Korea was later convicted of corruption and received a 15 year sentence.
The Samsung Group’s interests range from Samsung Electronics (005930.KS), the largest producer of CE products globally, Samsung Engineering (02803450.KS), Samsung Fine Chemicals (004000.KS), Samsung Fire & Marine (000810.KS) & Samsung Life Insurance (032830.KS) (insurance), Samsung Heavy Industries (010140.KS) (shipbuilding), Samsung Securities (016360.KS), and dozens of other affiliated companies ranging from machine tools to resorts, along with a multitude of JVs, controlling and non-controlling investments in hundreds of companies.
That said, with Lee’s death came tax time, and the family is said to have an inheritance tax liability of 12t won, or ~$10.8b which it must pay over the next 5 years. Sounds relatively simple, but the complexity comes from the fact that each Samsung affiliate will be directed to pass down shares to family members according to the wishes of the late Lee Kun-hee. Some of those shares will be used to pay the inheritance tax installments starting this month.
While the estate will be the subject of legal wrangling for some time, the family has also decided to donate the former chairman’s 23,000 piece art collection to public institutions, and will donate 1t won (~$898m US) to philanthropic organizations, with much going to the construction of South Korea’s first hospital for infectious diseases and a related R&D center, while almost $270m will go toward paying the expenses of children with cancer or rare diseases for the next 10 years. Aside from building Samsung into the powerhouse that it is today, that is a notable legacy.
The Samsung Group’s interests range from Samsung Electronics (005930.KS), the largest producer of CE products globally, Samsung Engineering (02803450.KS), Samsung Fine Chemicals (004000.KS), Samsung Fire & Marine (000810.KS) & Samsung Life Insurance (032830.KS) (insurance), Samsung Heavy Industries (010140.KS) (shipbuilding), Samsung Securities (016360.KS), and dozens of other affiliated companies ranging from machine tools to resorts, along with a multitude of JVs, controlling and non-controlling investments in hundreds of companies.
That said, with Lee’s death came tax time, and the family is said to have an inheritance tax liability of 12t won, or ~$10.8b which it must pay over the next 5 years. Sounds relatively simple, but the complexity comes from the fact that each Samsung affiliate will be directed to pass down shares to family members according to the wishes of the late Lee Kun-hee. Some of those shares will be used to pay the inheritance tax installments starting this month.
While the estate will be the subject of legal wrangling for some time, the family has also decided to donate the former chairman’s 23,000 piece art collection to public institutions, and will donate 1t won (~$898m US) to philanthropic organizations, with much going to the construction of South Korea’s first hospital for infectious diseases and a related R&D center, while almost $270m will go toward paying the expenses of children with cancer or rare diseases for the next 10 years. Aside from building Samsung into the powerhouse that it is today, that is a notable legacy.
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