SAMSUNG FAMILY TO PAY 12TN WON IN TAX

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Two days before the payment deadline, the late Samsung chairman Lee Kun-hee’s family announced their plans to pay more than 12 trillion won in inheritance tax. That’s nearly half of the financial worth Lee left behind, which is estimated at 26 trillion won, including 19 trillion won in stocks, as well as real estate and his art trove.

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The inheritance tax imposed on the Lee family amounted to more than 12 trillion won. This is the largest amount recorded in Korean history. It is more than triple the combined sum of all inheritance taxes collected last year. The Lee family announced that they will pay the tax in six installments over the next five years. They are expected to pay the tax with stock dividends and loans, but haven’t released any detailed funding plan. Growing attention is also on their plan to return a portion of their inheritance to society. First, 700 billion won will go towards building a hospital and a research center specializing in infectious disease control and response. Another 300 billion won will be used to help children living with cancer and rare diseases. While being investigated for Samsung slush funds, the late chairman had announced that he would donate the stocks under borrowed names to social causes. This promise is finally being honored 13 years later.

[Soundbite] Prof. Park Sang-in(Seoul Nat’l Univ.) : "They said they’ll return about 1 trillion won to society as the late chairman had instructed. But they had only paid the transaction tax when the shares kept under borrowed names were switched to his own."

Now the public is wondering how Samsung’s corporate governance would change. Given that the late Lee Kun-hee’s control over the Samsung Group stemmed from his shares in Samsung C&T Corporation, Samsung Life Insurance and Samsung Electronics…. how those stocks are distributed among the family members could determine their control over Samsung Electronics.

[Soundbite] Kim Hak-kyun(Director, Shinyoung Securities Research Center) : "In the long term, how the shares of Samsung Life Insurance, the main stockholder of Samsung Electronics, are divided would be the key factor in reorganizing the governance structure of Samsung Group."

But the Lee family did not say how the stocks will be divided. Samsung Electronics maintained that there is no dispute over stock distribution among the family members and added that the family will soon disclose how the shares will be divided.