Chae I-bae: "Lee Kun-hee's Passing Should Not Affect Lee Jae-yong's Trial"

“Gong is a Global Top-Tier Company · Samsung Republic with Gwan”
“Inheritance Tax on Stocks 10.6 Trillion Won... Must Prevent Tax Evasion”
“Long-term Adjustment Likely Through Affiliate Separation Method”

[Image source=Yonhap News]

[Asia Economy Reporter Lim Chun-han] Former Minsaengdang lawmaker Chae E-bae stated on the 26th regarding the impact of the passing of Samsung Chairman Lee Kun-hee on the trial of Samsung Electronics Vice Chairman Lee Jae-yong, “The most important thing is that the trial should not be influenced,” adding, “These are separate cases.”

On the same day, on MBC Radio’s ‘Kim Jong-bae’s Focus,’ former lawmaker Chae said, “With Chairman Lee’s passing, a very large inheritance tax will be paid, and these aspects were points of criticism in Vice Chairman Lee’s inheritance and succession process. Public opinion might somewhat change, but I think the trial must absolutely not be influenced.”

Regarding Chairman Lee’s achievements and faults, former lawmaker Chae said, “His greatest achievement was growing Samsung into a world-class company,” and added, “We must highly evaluate the significant innovations and accomplishments he brought to Korea’s semiconductor and electronics industries.”

On the faults, former lawmaker Chae pointed out, “If we talk about faults, it is that he created what we call the Samsung Republic. Regarding governance issues, especially inheritance, he inherited from former Chairman Lee Byung-chul through nominee stocks and nominee accounts, and for Vice Chairman Lee, he used methods like bonds with warrants or convertible bonds to acquire affiliate stocks at low prices, and there were issues of tax-free inheritance through practices like preferential business allocation. There was also an ultra-legal management policy denying labor rights guaranteed by our constitution under the no-union management policy, and ongoing controversies over unfair trade with subcontractors.”

Regarding the inheritance tax issue, former lawmaker Chae said, “If we look only at the listed company stocks of Chairman Lee, the stock value is 18.2 trillion won, most of which are Samsung Electronics stocks,” and added, “Calculating the inheritance tax, about 10.6 trillion won would be the tax related to the stocks.” He continued, “Chairman Lee’s assets were not only stocks. According to the 2008 Samsung special prosecution, there were 1,199 nominee accounts. The nominee funds uncovered by the special prosecution amounted to 4.5 trillion won,” and said, “Ultimately, during the inheritance tax payment process, the National Tax Service must properly investigate Chairman Lee’s assets again to prevent tax evasion.”

Former lawmaker Chae explained, “It is difficult to pay all at once, and since most assets are stocks, partial disposal is possible. In such cases, there is a system called installment payment over five years,” and added, “Recently, LG Group Chairman Koo Kwang-mo is also paying inheritance tax over five years following his father’s passing.”

Former lawmaker Chae said, “I think Chairman Lee probably wrote a will. If so, there might be mentions of inheritance and management rights not only for Vice Chairman Lee but also for Lee Boo-jin, President of Hotel Shilla, and Lee Seo-hyun, Chairwoman of the Samsung Welfare Foundation,” and added, “In the long term, I think they might have adjusted to avoid uncomfortable disputes among siblings by splitting the affiliates and dividing the group.”

Former lawmaker Chae said, “Vice Chairman Lee has already secured solid management rights over the entire Samsung Group, especially the largest electronics and financial businesses,” and concluded, “I don’t think there will be major changes in this regard.”

This content was produced with the assistance of AI translation services.