After the Death of Late Chairman Lee Kun-hee
Change Applications Must Be Submitted Within 3 Months
Bereaved Families Request Extension of Application Period
[Asia Economy Reporter Oh Hyung-gil] Following the death of the late Samsung Chairman Lee Kun-hee in October last year, interest has grown in the family's inheritance and the resulting changes in the shareholding structure. As a result, the timing of the change in the largest shareholder of Samsung Life Insurance, where Chairman Lee was the largest shareholder, has also been delayed.
This is because the bereaved family members, including former Leeum Museum Director Hong Ra-hee, Hotel Shilla President Lee Boo-jin, and Samsung Welfare Foundation Chairperson Lee Seo-hyun, requested an extension of the application period for the change of the largest shareholder of Samsung Life Insurance, which was accepted. However, there are also expectations that changes may occur in the restructuring of Samsung's governance as Vice Chairman Lee Jae-yong of Samsung Electronics was legally detained in the retrial related to the state affairs manipulation scandal.
According to financial authorities on the 19th, the Financial Services Commission resolved at the first meeting held on the 13th to approve the extension of the application period for the change of the largest shareholder of Samsung Life Insurance for the three individuals including Hong Ra-hee.
According to Article 31 of the Act on the Corporate Governance of Financial Companies (Financial Governance Act) and Article 26 of its Enforcement Decree, when a shareholder of a financial company acquires or transfers shares through inheritance, bequest, or private donation due to the death of the shareholder, and becomes the largest shareholder, an application for approval must be submitted to the Financial Services Commission within three months from the date of death of the existing shareholder. If the approval application is not submitted, the Financial Supervisory Service Commissioner may order the disposal of the shares within a period of up to six months.
In Chairman Lee's case, based on the date of death (October 25 last year), the application for the change of the largest shareholder was required by this week, within three months. However, if there are unavoidable reasons, the period can be extended within the three-month range with the approval of the Financial Services Commission, which applies in this case.
The timing of the largest shareholder change likely to be set after the inheritance tax payment deadline at the end of April
The timing of the change in the largest shareholder of Samsung Life Insurance is expected to be after April, when the inheritance structure becomes clear. At the time of his death on October 25 last year, Chairman Lee held 41,519,180 shares (20.76%) of Samsung Life Insurance. In addition, he held shares in Samsung Electronics (249,273,200 shares), Samsung Electronics preferred shares (619,900 shares), Samsung C&T Corporation (5,425,733 shares), and Samsung SDS (9,701 shares).
These shares, along with Chairman Lee's other assets, are scheduled to be inherited by the family, but how they will be divided has not yet been disclosed. If inherited according to the statutory inheritance ratio, Samsung C&T Corporation (19.34%) will become the largest shareholder of Samsung Life Insurance. When shares are divided according to the legal inheritance ratio, the spouse receives 3/9 and each child receives 2/9 of the shares.
Since the inheritance tax payment deadline is by the end of April this year, the timing of the change in the largest shareholder of Samsung Life Insurance is also expected to be delayed until after that. Some speculate that changes may occur in the restructuring of Samsung's governance as Vice Chairman Lee Jae-yong was legally detained yesterday.
On the 18th, the Seoul High Court sentenced Vice Chairman Lee to 2 years and 6 months in prison in the retrial on charges including bribery.
Meanwhile, the inheritance tax to be paid by the bereaved family is estimated to exceed 11 trillion won. According to the Korea CXO Research Institute, a corporate analysis specialist, the average stock valuation for these shares over four months from August 24 last year was calculated at 18.963299949 trillion won.
Based on this, the stock inheritance tax to be paid by the bereaved family was estimated at about 11.0366403 trillion won. Adding real estate, cash assets, and others is expected to increase the total inheritance tax amount.
In this case, the inheritance portion including major shares such as Samsung Electronics, Samsung Life Insurance, and Samsung C&T Corporation amounts to 7.8677 trillion won in stock assets for Mrs. Hong Ra-hee. The three children?Vice Chairman Lee Jae-yong, President Lee Boo-jin, and Chairperson Lee Seo-hyun?were each evaluated at about 5.2451 trillion won individually.
A Samsung Life Insurance official explained, "The extension of the application period for the change of the largest shareholder was requested by the parties involved," adding, "It is a matter proceeding separately from the company."
Samsung Electronics Vice Chairman Lee Jae-yong is attending the retrial sentencing hearing of the state affairs manipulation case held at the Seoul High Court in Seocho-gu, Seoul on the 18th. Photo by Hyunmin Kim kimhyun81@
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