Samsung heirs’ huge bill
THE heirs to South Korea’s Samsung group announced their plans yesterday to pay more than $10 billion (R142bn) in death duties – one of the world’s biggest-ever inheritance tax settlements – including donating Picasso and Monet artworks.
Lee Kun-hee, the late Samsung Electronics chairperson, was the country’s richest man when he died in October last year at the age of 78 after being hospitalised for years, leaving an estimated $19.6 billion in assets.
South Korea has stringent inheritance tax laws and high rates, resulting in a hefty bill for the family, including Samsung Electronics vice-chairperson Lee Jae-yong, who is in jail for bribery, embezzlement and other offences.
Lee’s family “expects to pay more than $10,7bn in taxes related to inheritance, which is more than half of the value of the late chairperson’s total estate”, Samsung said in a statement.
“The inheritance tax payment is one of the largest ever in Korea and globally,” it added, saying the Lee family would pay it off in six instalments starting this month.
The assets included shareholdings in Samsung Electronics, Samsung Life and Samsung C&T, as well as real estate, according to the statement.
Lee also left a trove of antiques and artworks reportedly worth $1.8bn to $2.6bn.
Around 23 000 pieces from Lee’s collection would be donated, Samsung said, including 14 items classed as national treasures that would be showcased at the National Museum of Korea.
Works by Western artists including a Claude Monet water lilies painting, Salvador Dali’s Family of Marsupial Centaurs, and pieces by Pablo Picasso, Paul Gauguin, Joan Miro and others would be donated to the National Museum of Modern and Contemporary Art, it added.
Reports said the art donations would reduce the family’s tax liability.
“Samsung has carried out a realistic calculation on donating the late Lee’s artworks,” said Kim Dae-jong, professor of business at Sejong University in Seoul. “If they had not decided to donate them but instead opted for the children to inherit them, it would have been subject to high inheritance tax.
“With their donation of such highvalue works, they don’t have to pay that tax while doing general public service at the same time.”
Another $897 000 would be donated to health causes, half of it to be spent on building South Korea’s first specialist infectious diseases hospital.
Samsung – whose flagship subsidiary is among the world’s biggest smartphone and computer chip makers – is by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th-largest economy.
The conglomerate is crucial to the country’s economic health – its overall turnover is equivalent to a fifth of the national gross domestic product.
The late chairperson’s eldest son and the group’s de facto leader, Lee Jae-yong, was jailed in January over a sprawling corruption scandal that brought down former president Park Geun-hye.
He is undergoing a separate trial over stock manipulation, which critics say was key to ensuring a smooth succession of power within the conglomerate.
Commentators online called yesterday for him to be freed, with one posting on Naver, the country’s largest portal: “Samsung is doing this much for the public, please release Lee Jaeyong now.”
Earlier this week, five major South Korean business groups appealed to the presidential Blue House for a pardon for him on national economic grounds.
But an official told reporters that it had “not considered a pardon for him so far and also have no plan, for now, to do so”.
In May last year Lee apologised for some governance issues at the group, pledging to ensure “there will be no more controversy over the succession” and that he would not allow his children to take over from him at the firm.