Samsung heirs donating art trove
Founding family aims to offset $10.8-billion inheritance tax with gift of rare works and funding for research.
SEOUL — Samsung’s founding family will donate tens of thousands of rare artworks, including Picassos and Dalis, and give hundreds of millions of dollars to medical research to offset a massive inheritance tax bill after the death last year of company Chairman Lee Kun-hee.
The Lee family, including his wife and three children, expects to pay more than $10.8 billion in taxes related to inheritance, which is more than half the wealth Lee held in stocks and real estate, Samsung said Wednesday. This would be the largest such tax payment in South Korea and more than three times the country’s total estate tax revenue for last year.
The family plans to divide the payment in six installments over five years, with the first payment this month.
“It is our civic duty and responsibility to pay all taxes,” the Lee family said in a statement. It had until Friday to report the extent of the inheritance and payment plans to tax authorities.
Raising cash for the tax payment is crucial for the Lee family to extend its control over Samsung’s business empire, which includes semiconductors, smartphones and TVs, along with construction, shipbuilding and insurance. Some analysts say the process could result in a shakeup across the group.
The late chairman, who died in October, owned 4.18% of Samsung Electronics, which is one of the world’s biggest makers of computer memory chips and smartphones, but also held stakes in Samsung affiliates that collectively owned a larger share than his in the electronics unit, the conglomerate’s crown jewel. This was part of a complex shareholding structure that has allowed Lee and his family to exert broad control over the group.
In Wednesday’s news release, Samsung did not mention how Lee’s wife and children would split his assets among them, and there’s speculation that they haven’t yet reached a final agreement.
Most market analysts believe that Lee’s shares will be distributed in a way that would strengthen the leadership of his only son and corporate heir, Lee Jaeyong, who is serving a prison term for bribery and other crimes but who remains the de facto chief of Samsung Electronics.
The elder Lee’s other children are Lee Boo-jin, CEO of Samsung’s Shilla luxury hotel chain, and Lee Seo-hyun, who heads the Samsung Welfare Foundation.
Giving away the late chairman’s vast collection of masterpieces could help mitigate the tax bill because his family wouldn’t need to pay taxes on donated artworks.
The family plans to donate 23,000 pieces from Lee’s personal collection to two state-run museums. They include old Korean paintings, books and other cultural assets designated as national treasures, and modern Korean painters such as Park Soo-keun and Lee Jung-seop. There are also works by Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro and Salvador Dali, Samsung said.
The National Museum of Modern and Contemporary Art said the 1,488 pieces it received constituted its biggest private donation.