22 trillion to pay 13 trillion inheritance tax, Samsung "controls the family" is a big headache
According to South Korea’s Chosun Ilbo, since the death of Samsung’s former chairman Lee Gun-hee last year, Samsung Electronics’ vice-chairman Lee Jae-yong, the Shilla Hotel’s president Lee Fu-jin, and Samsung’s apparel company have paid a huge wealth tax of up to 13 trillion won. The "controlling family" of Samsung Group such as Lee Su-hyun, Executive Vice President of Daiichi Wool Textiles, needs to raise hundreds of billions of won in unsecured financing from South Korean financial institutions.
Financing with stock guarantees?
South Korean securities institutions are unable to raise the corresponding funds
At the beginning, these "controlling families" of the Samsung Group originally planned to raise funds in the form of stock guarantees, but there is no domestic securities company that can meet their financing needs.
This is mainly due to the recent increase in domestic individual investors’ investment behavior through pledged stock financing, and Korean securities companies have basically reached the upper limit of financing.
According to an insider close to Li Jae-yong, “Brothers and sisters of Li Jae-yong and Hong Luoxi (Li Jianxi’s wife) have previously inquired with relevant securities companies, but the answers they received were “unable to meet such a huge financing demand”. , Eventually had to apply for unsecured financing.” It is understood that Lee’s stock (approximately worth 210 billion won last year) is his exact source of income, and he may get hundreds of billions of won in unsecured financing on this basis.
It is understood that Lee Kin-hee, the former chairman of Samsung Group, left a legacy worth 22 trillion won through stocks, art, and real estate.
His wife and children have to pay 13 trillion won in inheritance tax to the South Korean government in order to inherit these estates.
Even if the tax is paid in six-year instalments, the "controlling family" of the Samsung Group will have to pay 2 trillion won in inheritance tax this year.
However, due to management rights, it is difficult to sell so many stocks at once, and it is impossible for art to be used for payment in kind.
Deep in the 13 trillion "inheritance tax dilemma"
There is a dilemma between keeping the right to operate and getting enough funds
April 30th is the last date for Lee Kin-hee's family to file an estate tax declaration. As the deadline is getting closer, the "controlling family" of Samsung Group are worrying about how to raise so much money.
It is understood that Samsung Group conducted price appraisal of more than 12,000 artworks owned by Li Jianxi through three institutions including the Korea Gallery Association and the Art Appraisal Committee.
However, because the financial resources of the inheritance tax of more than 13 trillion won cannot be ensured, the "controlling family" can only carry out unsecured financing.
A relevant person in the South Korean financial industry said: “Because these people do not hold a high proportion of shares, it is not easy for them to transfer shares in core companies such as Samsung Electronics, Samsung C&T, and Samsung Life. It is also too much to use artwork as collateral. Reality. So the biggest problem they face now is how to ensure that they maintain their management rights and find enough funds to pay the sky-high inheritance tax."
It is understood that Lee Jianxi’s legacy is believed to be worth more than 22 trillion won.
Since Li Jianxi had a sudden stroke at the beginning, he was hospitalized and remained unconscious.
So so far, the issue of Li Jianxi's estate distribution has not been announced to the public.
According to the Korean inheritance law, his wife Hong Naxi will inherit three-ninths of Lee Gun-hee's estate, and three children including Lee Jae-yong will inherit two-ninths of the estate.
In addition, the highest rate of inheritance tax in South Korea is 50%, but for the chief controller of a large company, the tax rate will reach 60%.
Therefore, Lee Jianxi’s family will bear the inheritance tax of 13 trillion won.
In addition, if the payment is made in installments, the corresponding interest must be paid every year.
Therefore, Lee Jianxi’s family has to pay at least 2 trillion won in inheritance tax every year.
Unpaid for the past 4 years
Li Zairong's main source of income is share dividends
The first consideration for the source of inheritance tax is the share dividends of the heirs.
Last year, Samsung Electronics distributed 125 billion won in dividends to Lee Jae-yong's shares and 160 billion won in dividends to Hong Luoxi.
Li Jianxi’s share dividend was 740 billion won when he was alive.
Li Fuzhen and Li Xuxian do not hold shares in Samsung Electronics, so there is no dividend from Samsung Electronics.
Even if the share dividend is used to deduct the inheritance tax, the annual amount of 2 trillion won is a huge burden for Li Jianxi’s family.
In particular, Li Zairong has been unpaid for the past 4 years, and has no other income except for share dividends.
Even if Li Zairong wants to raise funds to pay inheritance tax by selling shares, it is not easy.
He currently holds only 0.7% of Samsung Electronics' shares, Samsung C&T's shares are 17.3%, and Samsung Life's shares are 20.8%.
He inherited 4.2% of Samsung Electronics' shares from Lee Jianxi, and 20.8% of Samsung Life's shares.
A relevant person in the financial sector said: “If Li Zai-yong sells his shares at this time, it is likely to attract attacks from foreign speculative capital, which may endanger his influence on Samsung Electronics, Samsung Life, and Samsung’s core companies. Control of the property."
The transfer of art has also become a huge problem
Many voices ask for free donations from Samsung Group
Since December last year, the Art Appraisal Committee of the Korea Art Museum Association, the Korea Art Appraisal Association, and the Korea Art Appraisal Research Center have conducted appraisal and evaluation of a series of Li Jianxi’s collections at the Lim Art Museum in Seoul, which has aroused widespread speculation. , They may be sold in the near future.
Now, the appraisal work is basically completed. The entire collection of Li Jianxi has reached 13,000 pieces. Among his collections are 30 national treasures, 82 unvaluable treasures, and 3,500 modern and contemporary art pieces (2,200 pieces of Korean art and 1,300 pieces) From the West), with a total value of 3 trillion won, equivalent to 2.66 billion U.S. dollars.
The works of artists such as Monet, Andy Warhol, Picasso, Sai Tombley, Alberto Giacometti and others are on the list.
An art appraisal expert who asked not to be named said: “Since Li Jianxi purchased these works, the price of some of them may have soared.” Another art expert who participated in the evaluation project said: “If these masterpieces are placed in In the same space, it can easily become one of the world's five largest art museums."
It is understood that Samsung’s “controlling the family” has considered selling some of the artworks owned by Li Jianxi to overseas markets, which may raise 2-3 trillion won.
For example, Li Jianxi owns the famous painting "Water Lilies" by the famous painter Monet, which may be able to sell for 100 billion won.
Recently, however, there have been many voices in Korea asking Samsung Group to donate these art pieces in the hands of Lee Kin Hee to art galleries or museums-mainly to prevent "Water Lilies" from being spread overseas.
But if the Samsung Group transfers it for free, there will be no funds to pay the high inheritance tax.
Some people have proposed that if the Samsung Group pays part of the artwork, it can be used to deduct part of the inheritance tax in order to prevent these valuable cultural properties from flowing overseas.
South Korean congressman Lee Kwang-jae proposed to the parliament to amend the relevant bill in November last year, but the South Korean parliament has not yet deliberated.
This proposal has also caused controversy in South Korea. Some people believe that this allows the "controlling family" of the Samsung Group to enjoy privileges.
Chengdu Commercial Daily-Red Star News Reporter Luo Tian