Samsung Family Requests... Delay in Change of Samsung Life Insurance's Largest Shareholder

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 for the change of 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 following 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 a major shareholder, an approval application 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 supposed to be submitted 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 to this case.

The timing for the change of 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 legal 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 deadline for paying inheritance tax is the end of April this year, it is expected that the timing for the change of the largest shareholder of Samsung Life Insurance will also be delayed until after that. Some speculate that the restructuring of Samsung's governance may be affected as Vice Chairman Lee Jae-yong was detained in court 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.

Change of Largest Shareholder Likely After End of April Inheritance Tax Deadline

Meanwhile, the inheritance tax that the bereaved family must pay 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 the bereaved family must pay is estimated to be about 11.0366403 trillion won. If real estate, cash assets, and others are added, the total inheritance tax amount is expected to increase.

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 separate from the company."

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