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Show me the Monet: Late Samsung chairman's family settles inheritance tax bill, massive art donation
Highly anticipated details of stock division still unavailable
Heirs of Samsung patriarch billionaire Lee Kun-hee issued a statement today partially detailing their inheritance tax strategy alongside financial and art charity contributions.
The statement said the family has "decided to give back to society through medical contributions and art donations." Lee Kun-hee's survivors include his wife, Hong Ra-hee, son Jae-yong ,and two daughters Boo-jin and Seo-hyun.
His heirs will pay the second largest inheritance tax in Korea's history, more than 12 trillion won ($10.7bn), in instalments. The first instalment, one-sixth of the total, is due this Friday.
The 2 trillion won ($1.8bn) annual payments will likely come from stock dividends, but bank loans could also feature.
Lee Kun-hee died last October. His father, Lee Byung-chul, founded Samsung and Kun-hee joined the firm in 1968. He became chairman in 1987 when Byung-chul died. Lee Kun-hee's estate is estimated at 22 trillion won ($19.8bn), inclusive of 19 trillion won ($17bn) worth of stock. Additionally, Kun-hee leaves behind about 3 trillion won ($2.7bn) worth of real estate and a staggering art collection.
Around 23,000 of Lee Kun-hee's art collection – which includes works from Picasso, Dali, Renoir, Gaugin, Miro, and Monet as well as relics and national treasures – will be donated to charity. The artworks slated for donation carry an estimated value not more than 2 trillion won ($1.8bn). Some art will go to local museums. The National Museum of Modern and Contemporary Art will receive 1,600 pieces.
"It is unprecedented that designated cultural properties are donated to the country on a large scale like this, so it is expected to contribute to the preservation of domestic cultural assets, enhancement of the people's right to enjoy culture, and research on art history," said Samsung.
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The estate said they were also donating 1 trillion won ($900m) to public health. Of the total monetary donation, half is slated for the development of Korea's first infectious disease hospital, 200 billion won ($180m) will go to vaccine treatment and research and a national epidemic disease centre. The remaining 300 billion won ($270m) will support rare child disease research.
The much-anticipated details of stock division were not shared publicly. The division of stock is expected to signal who takes leadership of Samsung Group moving forward. Currently Kun-hee's son, Jae-yong, largely controls the group with a healthy 17.33 per cent stake in Samsung C&T and a minor 0.7 per cent share in Samsung Electronics. Kun-hee held a 4.18 per cent stake in Samsung Electronics, 20.76 in Samsung Life Insurance, 2.88 per cent in Samsung C&T, and 0.01 per cent in Samsung SDS.
Jae-yong is currently serving a 30-month jail sentence for bribery, concealment of criminal proceeds, and embezzlement for actions designed to make him heir apparent in a 2015 merger deal. It is his second time to be indicted as he also faced bribery charges that resulted in 18 months of jail time in 2017.
Like father, like son, Kun-Hee also faced two criminal convictions in his lifetime. One was for bribing South Korea's former president, Roh Tae-woo, and another for tax evasion. He received a presidential pardon for both.
Jae-Yong's release is expected by July 2022, although that's not the end of his legal troubles as he faces an accounting fraud and stock manipulation probe for the 2015 Samsung C&T and Cheil Industries merger.
However, many are calling for his early release. Korean Yonhap News Agency reported yesterday that five of the country's major lobby groups presented a pardon recommendation letter for Jae-Yong to the executive office and official residence of the president of Korea, known as Cheongwadae.
The Korea Chamber of Commerce and Industry, the Korea Enterprises Federation, the Korea Federation of SMEs, the Korea International Trade Association, and the Federation of Middle Market Enterprises of Korea argued for Jae-Yong's release for the sake of the national economy amid a global semiconductor shortage.
Cheongwadae, also known as The Blue House, said it has no plans to release the heir early. ®