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(2nd LD) Jae-yong bolsters grip on Samsung Electronics after inheritance

All News 18:20 April 30, 2021

(ATTN: ADDS more info in last 5 paras, photo)
By Joo Kyung-don

SEOUL, April 30 (Yonhap) -- Lee Jae-yong, the apparent heir of Samsung Group, bolstered his control of Samsung Electronics Co. with stocks inherited from his late father, an indication that the ownership structure of South Korea's top conglomerate remains steadfast, affiliate filings showed on Friday.

Jae-yong, the vice chairman of Samsung Electronics, jacked up his stake in Samsung Life Insurance Co., to 10.44 percent from a meager 0.06 percent by inheriting half of late chief Lee Kun-hee's stake.

Samsung Life Insurance is the largest shareholder in Samsung Electronics, the group's crown jewel, with a 7.5 percent stake.

This composite photo shows heirs of Samsung Group. From left to right are Samsung Electronics Vice Chairman Lee Jae-yong, Hotel Shilla CEO Lee Boo-jin and Samsung Welfare Foundation chief Lee Seo-hyun. (Yonhap)

The eldest son of the senior Lee also inherited stakes in some affiliates, such as Samsung C&T Corp., the group's defacto holding company, Samsung SDS and Samsung Electronics in accordance with reserved portion along with his sisters -- Boo-jin and Seo-hyun -- and his mother Hong Ra-hee.

Jae-yong raised his stake in Samsung Electronics to 1.63 percent from the previous 0.7 percent, and upped his interest in Samsung C&T to 17.97 percent from 17.33 percent, according to each company's filings.

Jae-yong is the largest shareholder in Samsung C&T which also holds some 19.3 percent in Samsung Life.

The senior Lee held a 4.18 percent stake in flagship Samsung Electronics, 20.76 percent in Samsung Life Insurance, 2.88 percent in Samsung C&T, the group's de-facto holding company, and 0.01 percent in Samsung SDS.

Lee, who was South Korea's richest man, died in October last year and left assets estimated to be worth more than 25 trillion won, including his stocks valued at around 19 trillion won.

Lee's family on Wednesday said that they would pay more than 12 trillion won in inheritance taxes, the largest-ever in the country's history.

Earlier in the day, they paid their first installment of record inheritance taxes after reporting to the authorities. They paid one-sixth of their reported inheritance taxes upfront and will pay the rest over the next five years.

This photo taken on Jan. 18, 2021, shows Samsung Electronics Vice Chairman Lee Jae-yong arriving at the Seoul High Court in Seoul. (Yonhap)

Although Jae-yong has boosted his management power, there is still uncertainty over his future.

The 52-year-old is currently in jail after he was sentenced to 2 1/2 years incarceration by the Seoul High Court in January in a retrial of a bribery case involving former President Park Geun-hye.

Given the prison time he already has served, Jae-yong will be a free man in July 2022, unless he is granted a pardon or commutation.

Separate from the bribery case, Jae-yong is dealing with another court battle over a controversial merger of two Samsung affiliates and alleged accounting fraud.

In September, he was charged with unfair trading, stock manipulation and breach of trust in relation to the 2015 merger between Cheil Industries Inc. and Samsung C&T, seen as a key step toward his succession, and alleged accounting fraud at the pharmaceutical unit of Samsung Biologics Co.


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