Thursday, May 6, 2021

An Inheritance Tax Bill You Can’t ‘: $ 10.8 Billion

SEOUL – Picasso, Monet and Dali are among the assets with which South Korea’s richest family is participating as it prepares to pay one of history’s largest inheritance tax bills.

The Samsung family announced on Wednesday that it would pay $ 10.8 billion in inheritance taxes following the death of Samsung President Lee Kun-hee last year. South Korea has one of the most inherited taxes in the world. The family must inform the tax authorities how they plan to pay the bill by Friday.

The company would have deep implications for family control in the north, the largest and most profitable family-run conglomerate in South Korea. He said that the government has taken several steps to prevent such incidents.

Mr. Lee was credited with transforming Samsung into a global tech giant known for its semiconductors and smartphones. But the reorganized chairman kept many secrets, including how he wanted to divide his wealth between his wife and three children after he died.

Mr. Lee’s only son, Lee Jae-yong, is the de facto leader of Samsung. If he inherited his father’s shares in Samsung’s subsidiaries, it would strengthen the company’s control. But it is not clear how much or how much he will raise the billions of dollars needed to pay off the succession. He said that the government has taken several steps to prevent such incidents.

Analysts expected Mr. Lee to sell some nonsensical Samsung shares and secure a bank loan, forcing him to pay his Samsung dividends.

“How is the fate of Chairman Lee divided at the heart of the question governing Samsung, which oversees a family group from South Korea, also known as Chabol,” said editor Chung Sun-sup. It appears that the family has not yet reached a full settlement. “

The Lees are the richest family in South Korea. The $ 10.8 billion in inheritance taxes the family should pay is more than half the value of the father’s total wealth, according to Samsung, and more than three times the total inheritance taxes the government collected last year.

The family said it would donate Mr. Lee’s personal art collection to 23,000 works in South Korea as part of its plan to dispose of Mr. Lee’s assets. The collection is estimated at $ 2.2 billion by some South Korean media. It includes Claude Monet’s “Water Lily” and Pablo Picasso’s “Portrait of Dora Mar”.

The family committed a $ 900 million crime to fight the development of infectious diseases, and to help children suffering from cancer and rare diseases. Half of this amount will be spent in the construction of South Korea’s first hospital dedicated exclusively to infectious diseases.

The Lee family said the donation reflected Mr. Lee’s intentions of giving back to the communities. “But this sudden generosity comes at a time when the family has struggled to improve its public image.

In January, the son, who was the vice chairman of Samsung Prisoner After a sentence of two and a half years for bribery. In recent weeks, professional lobbying groups have appealed to the government to pardon them. Lee so that he could lead Samsung amid growing uncertainty in the semiconductor industry.

“It is our civic duty and responsibility to pay all taxes,” Lees said in a statement on Wednesday.

The family has not always followed that rule.

Samsung has long been facing accusations of trying to secure a father-son transfer of power at all costs, even if it meant breaking laws, avoiding taxes and buying political influence. This is a problem that Lee Jae-yong, the son, has confessed to himself.

“All the problems originally started with this succession issue,” he said said Last year. “From now on, I will ensure that there is no dispute again about the succession issue.”

His father was sentenced to three years in prison in a billion-dollar tax case in 2009. Secretly inherited His father, Samsung founder Lee Byung-chul. He hid money in stock accounts opened in the name of his associates. Samsung said at the time that Lee Kun-hee kept secret money to protect the company from hostile acquisitions from foreign investors.

The legal trouble of Lee Jae-yong stems from a similar problem. In January, he was convicted of bribing former South Korean President Park Geun-hye to obtain government support for the merger of two Samsung subsidiaries in 2015. The purpose of the merger was to tighten its control over Samsung.

Who will control Samsung, it has been the subject of much curiosity since the father’s death last year. The company accounts for one-fifth of South Korea’s total exports. Samsung Electronics, the group’s head, invested $ 213 billion in revenue alone and $ 32 billion in operating profit last year.

Lee Jae-yong has been running the congressional group since a heart attack in 2014. They own only 0.7 percent of Samsung Electronics, but hold 17.5 percent of Samsung C&T, a subsidiary formed in 2015 through a merger. His siblings also make small bets, giving the family a controlling stake in the company.

Through a web of circular holdings, the family continues to control the group. Samsung C&T owns 5 percent of Samsung Electronics and also controls 19.3 percent of Samsung Life. Samsung Life owns 8.5 percent of Samsung Electronics.

Lee Kun-hee owns 4.18 percent of Samsung Electronics, as well as 20.7 percent of Samsung Life. How those shares will be divided among the family will affect the son’s chances of running the business.

By law, the chairman’s widow, Hong Ra-hee, is entitled to receive one-third of the total inheritance, with an equal division among all the rest. Lee and his two sisters. But the Chabol family often reach a private agreement to ensure that the elder son controls the company.

Some South Koreans were surprised on Wednesday to find out the amount of inheritance taxes paid by the Lee family.

“Soon-to-be people like me can’t fathom,” said Park Soon-mi, a stay-at-home parent in Seoul. “It is good for the Chairman to leave so much money in taxes and make such a large donation to the society.”

Others were not so impressed.

This is not the first time the Lee family has promised to use their funds to benefit society as part of a larger scheme. In 2008, when Lee Kun-hee was charged with evading taxes, Samsung stated that Mr. Lee would use the money “not for the chairman or his family, but for some beneficial reasons.”

Kang Jong-min, Chabol expert of the civic group Solidarity for Economic Reform in Seoul, said the family did not speak until Wednesday. “It is following its old promise.”

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