Lee Kun-hee, the man who made Samsung what it is today, passed away at the age of 78 in October last year, leaving behind a fortune in stocks and assets with a total value of around 23 trillion won (~$21 billion). Lee’s heirs are now expected to inherit that fortune. However, they will have to pay an inheritance tax that could go as high as 13 trillion won ($11.7 billion), the highest in South Korea’s history.
Now, according to the Korean media, Samsung Electronics Vice Chairman Lee Jae-yong is looking to secure a personal loan of 500 billion won ($450 million) for financing the inheritance tax. This would also be the highest single personal credit loan in South Korea’s history. But, if someone can obtain it, that would be Lee Jae-yong, of course. He is the de-facto leader of the Samsung conglomerate, after all.
Vice Chairman Lee’s mother, Mrs. Hong Ra-hee, is also reportedly in the process of securing a loan for financing the inheritance tax. However, it’s unclear whether her two daughters – Lee Bu-jin, president of Hotel Shilla and Lee Seo-hyun, chairman of the Samsung Welfare Foundation – have similar intentions.
“There is no reason why banks would not lend credit to the Samsung heirs,” The Bell cited an official in the financial sector as saying. “They have excellent personal creditworthiness and cash-generating power”. Moreover, “the use of funds is also clear.”
However, securing a personal credit loan worth 500 billion won from a single financial institute could lead to a negative public opinion, industry watchers believe. Many people may see it as preferential treatment. As such, Vice Chairman Lee is reportedly to secure multiple loans from different financial institutions. This would also reduce the burden on the lending banks.
Banks could approve the $450 million loan to Lee Jae-yong this week
Samsung is reportedly preparing to reveal the details of the inheritance of the late Chairman Lee Kun-hee this week. But before that, the four Samsung heirs need to pay the inheritance tax. The deadline for filing the inheritance and paying the tax is April 30.
However, the heirs can choose to pay the inheritance tax in six installments over the next five years. So they essentially have to pay only one-sixth of the value right now. But that’s still a huge sum of money (nearly $2 billion). As such, they are looking to secure personal credit loans to finance the inheritance tax.
According to the report, the loans could get approved this week. Bank officials will meet Vice Chairman Lee Jae-yong personally at the Seoul Detention Center, where he’s imprisoned since January this year. He is serving a two-and-a-half-year sentence in the infamous 2017 bribery case involving then South Korea president Park Geun-hye.
His absence is hurting Samsung big time amid an unprecedented global semiconductor chip shortage. South Korean businesses are even seeking a presidential pardon for him so that he could facilitate the company’s investments. However, it’s unclear whether he will get such a big relief. Meanwhile, he is all set to officially take over as the leader of the Samsung Group.