Regulators set to approve Samsung heiresses' shareholder positions
The three children of late Samsung Group Chairman Lee Kun-hee and his widow Hong Ra-hee attend the last day of senior Lee's funeral on Oct. 28, 2020 in Suwon, Gyeonggi Province. The Financial regulators are likely to approve the three as major shareholders of Samsung Life Insurance after they received the insurer's stakes owned by their father, April 26. Korea Times file
Samsung leader Lee to be qualified as major shareholder
By Yi Whan-woo
Financial regulators are set to approve the three scions of Samsung ― Lee Jae-yong, Lee Boo-jin and Lee Seo-hyun ― as the major shareholders of Samsung Life Insurance, according to officials and sources familiar with the matter, Tuesday.
The life insurance arm of the country's top conglomerate is the largest shareholder of Samsung Electronics with 8.51 percent. Thus, owning Samsung Life Insurance stakes is critical to reaching the top of the chaebol's governance hierarchy, now that former Samsung Chairman Lee Kun-hee has passed away.
The Financial Services Commission (FSC) is scheduled to hold a meeting on Wednesday to discuss whether or not to confirm the late chairman's two daughters ― Hotel Shilla CEO Lee Boo-jin and Samsung Welfare Foundation chief Lee Seo-hyun ― as the new major shareholders.
“And the FSC decision is highly likely to be in their favor,” an industry source said, adding that they meet all criteria, such as investment capability, eligibility as business executives and clean records, in relation to any violations of financial regulations and the fair trade act.
The two had no shares in Samsung Life Insurance until Boo-jin received 6.92 percent and Seo-hyun received 3.46 percent of the firm's 20.76 percent stakes, previously held by their father, on April 26.
The FSC's eligibility assessment is required for those who newly inherit a large amount of stocks and want to be officially recognized as the major shareholders of an insurer. As the eldest child and the only son of Lee Kun-hee, Samsung Electronics Vice Chairman Lee Jae-yong is exempted from the FSC's qualification review because he already acquired 0.06 percent of Samsung Life Insurance in 2014.
He has increased his stake in Samsung Life Insurance to 10.44 percent by receiving half of the shares held by his father.
Jae-yong is now the life insurer's second-largest shareholder, second only to Samsung CT, of which he is also the controlling shareholder, with 17.97 percent.
He, along with his sisters and his mother, Hong Ra-hee, has also inherited stakes in other affiliates, such as Samsung SDS and Samsung Electronics, according to his father's will. His hold over the insurer, through this web-like corporate governance structure, makes him subject to a separate qualification review by the Financial Supervisory Service (FSS).
This separate qualification review is in accordance with financial regulations stating that an insurer's major shareholder must undergo an eligibility assessment every two years.
The FSS decision about the eligibility of Jae-yong to be a major shareholder is anticipated to come later this year.
“Jae-yong, like his sisters, has a high chance to qualify as a major shareholder,” another source said.
The vice chairman is currently in prison, after he was sentenced to two-and-a-half years in prison by the Seoul High Court in January, in a retrial of a massive bribery case involving impeached President Park, who is also serving a jail sentence.
The source speculated that Lee's imprisonment will not overshadow his management capabilities as Samsung Life Insurance's major shareholder.