You are here: Home » International » News » Companies
Business Standard

Samsung heirs commit $13-billion shares to buy time for tax bill

Most of the Samsung stock is parked with a court as collateral for the inheritance tax levy of more than 12 trillion won ($10.1 billion)

Topics
Samsung | Stock movemnet | Samsung heir

Bloomberg 

Samsung

Group’s heirs have pledged stock worth more than $13 billion in one of the world’s largest collateral commitments, mostly to buy time to pay a massive inheritance tax bill.

Since April, Jay Y. Lee and his family have committed part of their stakes in four of the conglomerate’s firms, including Electronics Co. and de-facto holding company C&T Corp., filings show. Among the 500 members of the Bloomberg Billionaires Index, only Oracle Corp.’s Larry Ellison has pledged more shares.

Most of the Samsung stock is parked with a court as collateral for the inheritance tax levy of more than 12 trillion won ($10.1 billion). The heirs of Lee Kun-hee, the group’s patriarch who died last year, revealed in April they would settle the bill in six installments over five years. “It’s the best way for the Samsung family to pay the huge tax,” said Chung Sun-sup, chief executive officer of corporate-analysis firm Chaebul.com in Seoul. “The easiest way would be cashing in their stakes, but they wouldn’t want to reduce their ownership. Pledging shares for tax installments doesn’t affect their voting rights.”

The arrangement is relatively common among the rich in South Korea, where the death tax rate can be as high as 60%. In order to pay in installments, the law requires collateral worth 120% of the amount due. The sum is decided based on the closing stock prices the day before an agreement is made.

The Lees have deposited stock that is now worth $10.7 billion with the Seoul Western District Court, the filings show.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, November 25 2021. 23:05 IST
RECOMMENDED FOR YOU
.