Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Samsung heiresses pay inheritance tax with secured loans
From right, late Samsung chief Lee Kun-hee's wife, Hong Ra-hee, and her children ― Jae-yong, Boo-jin and Seo-hyun attend Lee's funeral in Suwon, Gyeonggi Province in this photo taken on Oct. 28, 2020. Korea Times file
By Yi Whan-woo
By Yi Whan-woo
Three heiresses of late Samsung chief Lee Kun-hee took out more bank loans to pay massive inheritance taxes by putting up their respective shares in the company as collateral, according to a business think tank, Wednesday.
Such increases in money lending from banks suggest that “chaebol,” or conglomerates family members could be struggling to pay inheritance taxes, which are being disputed for being excessively high compared to that of other OECD member countries.
A Seoul-based think tank on corporate analysis, Leaders Index, said the combined amount of loans taken out by Lee's wife, Hong Ra-hee, and his two daughters ― Boo-jin and Seo-hyun ― with their company stocks as collateral, increased by 2.19 trillion won ($1.66 billion) to 4.78 trillion won for the past one year.
The loans account for 40.4 percent of the value of Samsung stocks belonging to the three heiresses, and also doubled from a year ago, Leaders Index said.
It said Lee's son and incumbent Samsung chief, Jae-yong, does not have any secured loans owed to banks.
Leaders Index's announcement comes as Korea imposes a maximum inheritance tax rate of 50 percent, far higher than the OECD average of 25 percent and the second-highest only after Japan's 55 percent.
Leaders Index said that 36 of the 72 chaebols it monitored had at least one direct family member of each group's owner obtain bank loans by using their company shares as collateral. LG Group chief's five family members also had loans increase from 145.9 billion won to 274.7 billion won, and SK Group's 10 family members have borrowed 557.5 billion won by providing SK and SK Discovery shares as collateral.