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Samsung's succession by Lee Jae-yong and possible governance structure change in spotlight

Arirang News
Arirang News
이건희 별세, 총수 이재용 시대 열린다...지배 구조는 어떻게?

With Lee Kun-hee passing away, focus turns to the path Samsung Group will take going forward under the leadership of his son, Lee Jae-yong.
The biggest question is whether Samsung is going to change its governance structure and whether Lee Kun-hee's children will be hit with a record amount of inheritance tax.
Kim Sung-min reports.
Following the death of Lee Kun-hee, the succession process for South Korea's top conglomerate becomes the new center of attention.
Lee Jae-yong, Samsung's de facto leader, has been spearheading the company's management since 2014, when his father collapsed due to a heart attack.
His succession is almost complete as South Korea's fair trade watchdog formally recognized Lee Jae-yong as the group's chief two years ago.
While questions were immediately raised as to whether the group will undergo massive governance restructuring, the fact Lee Jae-yong already has a strong grip on the group makes that unlikely.
However, as the ruling Democratic Party of Korea is in the process of passing reform bills preventing insurance firms investing more than 3 percent of their total assets, this could become a variable for the group's current structure.
Some industry watchers assume Lee Jae-yong will sell some of his Samsung Life stocks to acquire his father's stocks in Samsung Electronics and Samsung C&T.
Lee Kun-hee held around four percent of common stocks in Samsung Electronics and was the largest shareholder of Samsung Life Insurance at more than 20 percent among others,... leaving behind around 16 billion U.S. dollars in assets.
For Lee Jae-yong to inherit all of them, he would have to pay around nine billion dollars in inheritance tax.
The record high tax makes it unlikely Lee will inherit all his father's assets, but he can still choose to leverage his current financial assets to acquire at least some of them..., such as by selling some of his own stocks.
The family can also choose to spread payment of the taxes by up to five years under South Korean law.
The LG Group family earlier decided to pay their taxes over five years when they inherited assets from their late chief.
Some industry watchers say the Lee family could possibly donate some the assets to society since the tax is so high.
Kim Sung-min, Arirang News