Chairman Kim Beom-su's Reason for Gifting to Family Amid Kakao's Historic High Price

-Confidence in Further Stock Price Rise from Low Point
-Appears to Consider Public Opinion on Social Value

[Asia Economy Reporter Kang Nahum] Various interpretations are pouring in regarding the timing of the donation of Kakao Chairman of the Board Kim Beom-su's company shares worth around 140 billion KRW. This is because he decided to make the donation despite having to pay a huge gift tax at a time when the stock price recorded an all-time high.

How much gift tax will be paid?

According to Kakao on the 21st, Chairman Kim recently donated 330,000 company shares to his relatives. His wife Hyung Mi-seon and two children Sang-bin and Ye-bin each received 60,000 shares. The 60,000 shares are worth 26.64 billion KRW based on the previous day's closing price.

In addition, relatives such as Kim Haeng-ja (25,000 shares), Kim Myung-hee (20,800 shares), Kim Dae-hwan (4,200 shares), Kim Hwa-young (15,000 shares), Jang Yoon-jung (5,415 shares), Kim Ye-rim (4,585 shares), Kim Eun-jung (15,900 shares), Kim Geon-tae (4,550 shares), Kim Yu-tae (4,550 shares), Hyung Mi-sook (19,000 shares), and Park Hyo-bin (6,000 shares) also received shares. Chairman Kim's shareholding ratio decreased from 14.20% (12,500,631 shares) to 13.74% (12,176,631 shares).

In particular, the gift tax is expected to be enormous for Chairman Kim's wife and two children, corresponding to the number of shares they received. According to the current Inheritance and Gift Tax Act, if the donation amount exceeds 3 billion KRW, the highest tax rate of 50% is applied, and an additional 20% surcharge is added for shares held by major shareholders of large corporations. In total, Chairman Kim's wife and two children must pay a 60% gift tax. The gift tax is determined based on the average closing price for two months before and after the donation date. Although there may be differences depending on stock price fluctuations over the next two months, assuming the current stock price is maintained for the time being, the gift tax burden for each member of Chairman Kim's family is expected to reach 15 billion KRW.

Donation at the stock price peak... Why?

Generally, to save even a little on such a huge gift tax, it is common to donate shares when the stock price has fallen. However, on the 12th, when the major shareholder's donation triggered the obligation to report changes in shareholding, Kakao's stock price closed at 457,500 KRW, marking a record high.

Various interpretations have emerged in the industry regarding this. First, it is interpreted as an expression of Chairman Kim's confidence, viewing the current stock price as a low point. In fact, Kakao is expected to record its highest-ever performance in the fourth quarter of last year, thanks to the growth of its subsidiaries. Securities firms forecast Kakao's fourth-quarter sales last year to reach 1.168 trillion KRW and operating profit to be 141.7 billion KRW. Additionally, Kakao Bank, Kakao Pay, and Kakao Page are preparing for initial public offerings (IPOs) this year, raising expectations for further stock price increases.

There is also an analysis that Chairman Kim considered public opinion. An industry insider said, "Since Kakao benefited considerably from COVID-19, if the donation had been made during a market crash, it would have faced criticism," adding, "It seems the timing of the donation was considered so as not to conflict with social values."

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