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 family members sell over $1.5 bil. worth shares to pay inheritance taxes
Lee Kun-hee, front-row right, then-chairman of Samsung Group, sits with his wife Hong Ra-hee, front-row center, and their children as they watch the men's 400-meter swimming final at the the 2012 London Summer Olympics in July of the same year. Yonhap
By Yi Whan-woo
Three of the surviving family members of late Samsung Group Chairman Lee Kun-hee unloaded more than 2 trillion won ($1.52 billion) worth of shares in Samsung Electronics combined through a block deal, according to industry sources, Thursday.
The sale of the shares by Lee’s widow, Hong Ra-hee, and their two daughters – Boo-jin and Seo-hyun – comes as they sought to secure cash to pay massive inheritance taxes incurred after Lee’s death in October 2020.
The sources said the three sold a combined 29.8 million shares in Samsung Electronics worth 2.16 trillion won, with Hong unloading the largest amount at 19.32 million shares or a 0.32 percent stake in the company.
Seo-hyun sold 8.1 million shares or a 0.14 percent stake, and Boo-jin unloaded 2.4 million shares or 0.04 percent.
The sale was made at a discount of 1.2 percent to 2 percent from Samsung Electronics’ closing share price of 73,600 won, Wednesday, the sources noted.
“The family members accordingly are expected to be less burdened by inheritance tax,” the source said.
The inheritance taxes totaled 12 trillion won and the family members have been paying their inheritance taxes in installments over a five-year span that started in April 2021.
Korea's inheritance tax rate of a maximum 50 percent is far higher than the OECD average of 25 percent and the second-highest only after Japan's 55 percent. It is thus not unusual for Korea's chaebol family members to sell shares or even obtain bank loans by using their company shares as collateral to pay inheritance taxes.