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Samsung Electronics Vice Chairman Purchases Shares of Samsung Group’s Financial Arms
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Samsung Electronics Vice Chairman Purchases Shares of Samsung Group’s Financial Arms
  • By matthew
  • October 29, 2014, 07:21
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Samsung Electronics Vice Chairman Lee Jae-yong is looking to acquire shares of Samsung Life Insurance and Samsung Fire & Marine Insurance.

Industry experts and the financial authorities are regarding this as a preparation for his inheritance of the Samsung Group’s financial and manufacturing subsidiaries. If the vice chairman clears the major shareholder eligibility assessments at this time, he can inherit Chairman Lee Kun-hee’s shares with greater ease later. Some people also say that the share purchase has to do with establishing an intermediate financial holding company, but the authorities are ruling out the possibility.

It was about a month ago that the vice chairman sought approval for his purchase of 0.1 percent of the shares of each of the companies. “I would like to buy the shares at 25.2 billion won [US$24.1 million], which was obtained by selling my 7.7 percent shares in Samsung Asset Management to Samsung Life Insurance,” he said at that time.

As of the end of June this year, Chairman Lee Kun-hee owns 20.76 percent of Samsung Life Insurance shares. Cheil Industries, the Samsung Culture Foundation, and the Samsung Welfare Foundation have 19.34 percent, 4.68 percent, and 2.18 percent, respectively. The chairman and the affiliate persons are in possession of 46.97 percent combined. Samsung Life Insurance is the largest shareholder of Samsung Fire & Marine Insurance, with a shareholding of 14.98 percent, 18.41 percent when those of the affiliate persons are included. The vice chairman has zero shares in these financial arms. According to the Insurance Business Act, the vice chairman becomes an affiliate person when he owns their shares, and thus he has to obtain approval from the authorities.

It seems that his move also allows for the possibility that the shares to be handed over by the chairman could be split between his wife, daughters, and himself. Vice Chairman Lee Jae-yong cannot cement his position as the largest shareholder of Samsung Life Insurance unless he accumulates the shares. “It is wrong to say that the minority share purchase is related to the establishment of an intermediate financial holding company, because the vice chairman is already influential enough in Samsung Life Insurance as the largest stockholder of Samsung Everland, which is the second-largest shareholder of the insurer, with a shareholding ratio of 25.10 percent,” an industry insider explained, continuing, “Rather, it has more to do with further solidifying his position as its biggest shareholder.”