July 18, 2024

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Samsung’s Lee family to pay more than $10.8 bln tax,and will donate art

The family of late Samsung Electronics chairman Lee Kun-hee said on Wednesday they will pay more than 12 trillion won ($10.8 billion) in inheritance taxes for his estate and  donate his vast private art collection to state curators.

“It is our civic duty and responsibility to pay all taxes,” it said in a statement released by Samsung.

Lee, who is credited with transforming Samsung into the world’s largest smartphone and memory chip maker, died on Oct. 25 with an estate valued at around 26 trillion won. The Lee family’s handling of the hefty inheritance tax bill, one of the largest-ever in Korea and globally has been closely watched as it could have resulted in the dilution of the family’s controlling stake in Samsung.

The family said they plan to pay the tax over the period of 5 years in six installments starting this month. The move has been closely noticed amid talk of big donations to make reparations for Lee’s conviction on tax evasion and embezzlement charges over a decade ago.

The family announced a plan to donate nearly one billion dollar to improve public healthcare, with half of that going towards building South Korea’s first specialist hospital for infectious disease.

Much of Lee’s extensive and most ravishing personal art collection, including the masterpiece of Picasso and Monet will be donated to organizations including the National Museum of Korea.

The family said the philanthropic donations from Lee’s estate would “uphold his legacy and contribute to the creation of a better society.”

Shares in Samsung C&T shares dropped as much as 5.5%, however, as the statement provided no detail on how Lee’s shares would be distributed, if any shares would be sold, nor specifics on how the family planned to fund the payments.

Investors will instead need to wait for regulatory filings to discover changes in shareholdings by Lee’s son and Samsung Electronics vice chairman Jay Y. Lee or other family members.

Analysts have said the family is likely to use loans and dividends from both their own and Lee’s shares to pay the tax.