Dealing with $11B tax invoice, Samsung heirs donate huge artwork trove

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SEOUL, South Korea (AP) — Samsung’s founding household will donate tens of 1000’s of uncommon artworks, together with Picassos and Dalis, to assist them pay an enormous inheritance tax invoice following final yr’s dying of firm chairman Lee Kun-Hee.

They will even give a whole lot of thousands and thousands of {dollars} to medical initiatives and analysis in an obvious try to enhance their public picture as they proceed with a multiyear plan to inherit each the wealth and company energy of South Korea’s richest-ever businessman.

The Lee household, together with his widow and three youngsters, expects to pay greater than 12 trillion received ($10.8 billion) in inheritance taxes, which is greater than half the wealth Lee held in shares and actual property, Samsung mentioned Wednesday. This is able to be the biggest quantity in South Korea and greater than 3 times the nation’s complete property tax income for final yr.

Giving freely the late chairman’s huge assortment of artwork masterpieces would cut back the taxable parts of his property.

The household plans to divide the cost in six installments over 5 years, whereas making the primary cost this month.

“It’s our civic obligation and accountability to pay all taxes,” the Lee household mentioned in a press release. They’d till Friday to report the extent of the inheritance and cost plans to tax authorities.

Elevating money for the tax cost is essential for the Lee household to increase its management over Samsung’s enterprise empire, which extends from semiconductors, smartphones and TVs to building, shipbuilding and insurance coverage. Some analysts say the method might end in a shakeup throughout the group.

The late Lee owned 4.18% of Samsung Electronics, which is among the world’s largest makers of pc reminiscence chips and smartphones, but additionally held stakes in Samsung associates that collectively owned a bigger share than his within the crown jewel electronics firm. The complicated shareholding construction has allowed Lee and his household to exert broad management over the group.

In Wednesday’s assertion, Samsung didn’t point out how Lee’s widow and youngsters would cut up his property, and there’s hypothesis they haven’t reached a last settlement.

Most market analysts consider Lee’s shares will probably be distributed in a approach that may strengthen the management of his solely son and company inheritor, Lee Jae-yong, the de facto chief of Samsung Electronics who’s at the moment imprisoned for bribery and different crimes. Lee’s different youngsters are Lee Boo-jin, CEO of Samsung’s Shilla luxurious lodge chain, and Lee Website positioning-hyun, who heads the Samsung Welfare Basis.

The household plans to donate 23,000 artwork items from Lee’s private assortment to 2 state-run museums. They embrace previous Korean work, books and different cultural property designated as nationwide treasures, and trendy Korean painters akin to Park Soo-keun and Lee Jung-seop. There are additionally the works of Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro and Salvador Dali, Samsung mentioned.

The Nationwide Museum of Trendy and Up to date Artwork mentioned the 1,488 items it obtained from the Lee household was its largest personal donation. The works included Lee Jung-seop’s “Bull,” Dali’s “Household of Marsupial Centaurs,” Monet’s “Water Lily Pond (Le Bassin Aux Nympheas),” and Chagall’s “Pink Bouquet With Lovers (Les Amoureux Aux Bouquets Rouges).”

The Nationwide Museum of Korea will obtain round 21,000 items from Lee’s assortment of Korean conventional artwork, together with work, ceramics and sculptures.

Hwang Hee, South Korea’s tradition minister, mentioned among the artwork donated by Lee will probably be displayed for the general public beginning in June. He expressed “deep gratitude” to the Lee household for “enriching” the nation’s cultural property, however he sidestepped questions on whether or not he thought Samsung was making an attempt to create a optimistic ambiance for Lee Jae-yong to get pardoned.

Lee household will even donate 1 trillion received ($900 million) to assist fund infectious illness analysis and remedy for kids with most cancers and uncommon sicknesses.

About half of that cash will probably be used to assist finance the institution of a 150-bed hospital offering specialised remedy for infectious illnesses. Consultants had raised the necessity for such amenities outfitted with destructive strain rooms and different superior methods following the emergence of COVID-19.

About 300 billion ($267 million) of the funds will go right into a decadelong program with the Seoul Nationwide College Kids’s Hospital to assist households pay for the remedy of kids with most cancers and uncommon illnesses and assist scientific trials and drug improvement.

“Members of the (Lee household) hope to honor the lifetime of the late Chairman Lee and his dedication to company citizenship and co-prosperity by giving again to communities,” Samsung mentioned.

Earlier than his dying in October, Lee was credited for remodeling Samsung Electronics from a small tv maker into a world big in semiconductors and client electronics. However his management was additionally marred by corruption convictions that highlighted the historically murky ties between the nation’s family-owned conglomerates and politicians. He had been hospitalized for years following a coronary heart assault in 2014.

Lee Jae-yong, who has since helmed the group in his capability as vice chairman of Samsung Electronics, is at the moment serving a 2 1/2-year sentence for bribing then-President Park Geun-hye and her shut confidante to win authorities assist for a 2015 merger between two Samsung associates. The deal helped strengthen Lee’s management over the Samsung group, however the revelations about his corrupt ties with the Park authorities fueled a 2016 corruption scandal that spurred enormous protests and ousted Park from workplace.

The youthful Lee has vowed to enhance Samsung’s company tradition, declaring that heredity transfers on the group would finish and that he wouldn’t cross the administration rights he inherited to his youngsters. He additionally mentioned Samsung would cease suppressing worker makes an attempt to prepare unions, though labor activists have questioned his sincerity.

A rising variety of politicians, non secular and enterprise leaders have been calling for President Moon Jae-in to pardon Lee. They are saying it will assist Lee strengthen Samsung’s international management in semiconductors and he might presumably use his enterprise attain to assist the nation safe extra coronavirus vaccines.

Critics level out that Samsung didn’t present indicators of hassle when Lee was in jail in 2017 and 2018, and that jail phrases have by no means actually stopped company leaders from relaying their administration choices from behind bars.

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