Samsung Family Completes Stock Inheritance Through Family Harmony... Hong Ra-hee Serves as the 'Center of Gravity'

[Asia Economy Reporter Su-yeon Woo] The inheritance of shares held by the late Samsung Chairman Lee Kun-hee has been finalized among the Samsung family. This inheritance distribution is evaluated as a family harmony that supports Vice Chairman Lee Jae-yong's management rights while recognizing the individual property rights of the bereaved family members to the greatest extent possible.

Chairwoman Hong Ra-hee, the chairman's spouse, contributed to strengthening the eldest son's management rights by conceding her shares in Samsung Life Insurance, which connects the group's governance structure, to Vice Chairman Lee. At the same time, Hong has become the largest individual shareholder of Samsung Electronics, which is also seen as maintaining her influence over the entire Samsung Group in the future.

On the 30th, Samsung Group announced that it would inherit the shares held by Chairman Lee in Samsung Electronics, Samsung SDS, Samsung C&T, etc., to the bereaved family members according to the statutory inheritance ratio. The statutory inheritance ratio is 3/9 (33%) for Chairwoman Hong, and 2/9 (22%) each for the three siblings: Vice Chairman Lee Jae-yong, President Lee Boo-jin of Hotel Shilla, and Chairwoman Lee Seo-hyun of the Samsung Welfare Foundation.

However, the bereaved family members supported strengthening management rights by transferring more than half of the Samsung Life Insurance shares, where Chairman Lee held over 20% and was the largest shareholder, to Vice Chairman Lee. It is reported that Chairwoman Hong conceded her inheritance portion of Samsung Life Insurance shares to Vice Chairman Lee for this purpose. As a result, Vice Chairman Lee was able to increase his Samsung Life Insurance shareholding from the existing 0.06% to 10.44%.

In the business community, it is believed that the shares of Samsung Electronics, Samsung C&T, Samsung SDS, etc., held by Chairman Lee were not high, so the inheritance would not significantly affect management rights, and thus the shares were divided according to the statutory ratio. Instead, it is interpreted that the Samsung Life Insurance shares, which play an important role in the group's governance structure, were concentrated to Vice Chairman Lee, solidifying the group's management rights.

With this share inheritance, Vice Chairman Lee's control within the group has become even stronger, and there is no significant change in the governance structure that connects 'Samsung C&T → Samsung Life Insurance → Samsung Electronics.' Vice Chairman Lee is the largest shareholder with 17.97% of Samsung C&T shares and has become the largest individual shareholder in Samsung Life Insurance, the second key affiliate. Through this, he appears to have secured control over the remaining affiliates.

Meanwhile, Chairwoman Hong became the largest individual shareholder of Samsung Electronics (with a 2.3% stake) through this inheritance and newly appeared on the shareholder registers of Samsung C&T (0.96%) and Samsung SDS (3,233 shares). This is interpreted as a decision to strengthen Hong's influence within the group while alleviating the inheritance tax burden on the three siblings.

Until now, President Lee and Chairwoman Lee, who did not hold shares in Samsung Electronics or Samsung Life Insurance, likely had a relatively low dividend income and thus faced a heavy inheritance tax burden. Also, if Vice Chairman Lee were to inherit all Samsung Electronics shares, the inheritance tax alone would amount to 9 trillion won. Adding the necessary inheritance portion of Samsung Life Insurance shares to strengthen group control would require him to bear nearly 10 trillion won in taxes alone, making it practically an impossible scenario.

Therefore, it is interpreted that Chairwoman Hong played a central role in organizing the inheritance shares of the three siblings while sharing such inheritance tax burdens. Additionally, there is a prospect that Hong, who has become the largest individual shareholder of Samsung Electronics, could act as a 'casting vote' to decide major group issues such as defending management rights or affiliate separation issues in the future.