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Samsung Heirs Not Selling Samsung SDS Stakes Even After Lock-up Period Ends
Cautious Approach
Samsung Heirs Not Selling Samsung SDS Stakes Even After Lock-up Period Ends
  • By Jung Suk-yee
  • May 15, 2015, 02:30
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Cheil Industries’ Executive Vice President Lee Seo-hyun (left), second daughter of Samsung Group Chairman Lee Kun-hee (center), and his eldest daughter Lee Boo-jin (right), president of Hotel Shilla and Samsung Everland.
Cheil Industries’ Executive Vice President Lee Seo-hyun (left), second daughter of Samsung Group Chairman Lee Kun-hee (center), and his eldest daughter Lee Boo-jin (right), president of Hotel Shilla and Samsung Everland.

 

Lee Jae-yong, vice chairman of Samsung Electronics and the heir apparent of Samsung Group, is unlikely to sell out shares of Samsung SDS, although the lock-up period for the stocks held by major shareholders has expired under local financial law.

Samsung SDS was listed on the KOSPI market in November last year, and the six-month lock-up period for large shareholder stakes was over on May 14. It means that Lee and his family members are now allowed to sell their stakes of Samsung SDS.

Lee Jae-yong, the only son of chairman Lee Kun-hee, who has been hospitalized since May of last year after suffering a heart attack, holds an 11.25 percent stake in Samsung SDS, with his two sisters -- President Lee Boo-jin of Hotel Shilla and Lee Seo-hyun, CEO of the fashion division at Cheil Industries -- holding a 3.09 percent stake each.

Vice Chairman Lee acquired Samsung SDS shares in 1999 through the purchase of bonds with warrants for only 10.3 billion won (US$9.43 million), subject to harsh criticism for the shoddy deal.

The listing of Samsung SDS was viewed by many people as a means for Vice Chairman Lee and his sisters to generate cash that would fund the inheritance tax for the group's managerial transfer to the three children.

Industry experts estimate that Vice Chairman Lee will reap at least 2 trillion won (US$1.8 billion) from the sale of his stake. It is also estimated that Lee Jae-yong and his two sisters will have to pay at least 6 trillion won (US$5.5 billion) to inherit their father’s assets.