By Inheriting Samsung Life Insurance Shares
The Samsung Group owner family, including Samsung Electronics vice chairman Lee Jae-yong, is scheduled to disclose details regarding their inheritances from the late Samsung Group chairman Lee Kun-hee as early as April 27.
The late Samsung chairman’s wealth includes shareholdings in Samsung Electronics (4.18 percent of common shares and 0.08 percent of preferred shares), Samsung Life Insurance (20.76 percent), Samsung C&T (2.88 percent), and Samsung SDS (0.01 percent). These shares will be inherited by Hong Ra-hee, the late chairman’s wife and former director of the Leeum Museum of Art; Lee Jae-yong, the late chairman’s only son; Hotel Shilla president Lee Boo-jin, a daughter of the late chairman; and Lee Seo-hyun, the other daughter and chairwoman of the Samsung Welfare Foundation.
These family members had reached an agreement on inheritances a long time ago while Lee Kun-hee was hospitalized. A prevailing observation is that the late chairman’s wealth will be distributed in a way that will solidify Lee Jae-yong’s control of Samsung Electronics. In this regard, the most valuable components of the late chairman’s wealth are his shareholdings in Samsung Life Insurance and Samsung Electronics.
Lee Jae-yong currently controls Samsung Group based on his 17.33 percent stake in Samsung C&T. This de facto holding company controls Samsung Life Insurance, which in turn controls Samsung Electronics. Lee’s own stakes in Samsung Life Insurance and Samsung Electronics are a mere 0.06 percent and 0.7 percent, respectively.
The late chairman controlled Samsung Group based on his 20.76 percent stake in Samsung Life Insurance. He inherited this stake from his father and group founder Lee Byung-chul. This means his stake in Samsung Life Insurance symbolizes control of the group.
For this reason, the bereaved family members may have agreed that Lee Jae-yong inherits the entire or a significant protion of the late chairman’s stake in Samsung Life Insurance. The insurance company also holds a 8.51 percent stake in Samsung Electronics.
For the same reason, much of the late chairman's stake in Samsung Electronics (4.18 percent) is likely to be inherited by Lee Jae-yong. However, other family members may need to hold a stake in Samsung Electronics as they have to pay their astronomical inheritance taxes with a dividend income from Samsung Electronics. For this reason, the late chairman’s stake in Samsung Electronics is likely to be evenly divided among the family members. Samsung Electronics paid out a record-high dividend of more than 13 trillion won to shareholders this month. The group’s owner family received a total of 1.34 trillion won in dividends.