South Korea's powerful Lee family faces a battle to maintain control of Samsung Group, the country's biggest conglomerate, following the death of patriarch and group Chairman Lee Kun-hee.
From the astronomical inheritance tax bill to potential legal obstacles, here are some of the issues the family faces as it seeks to stay on top of the business empire founded back in 1938.
CROWN JEWEL
The family is expected to focus on maintaining control of the conglomerate's crown jewel Samsung Electronics Co Ltd, but family members' combined direct stake ownership is only at 5.8%.
Their outsized control is made possible through their shareholding in Samsung Life Insurance, which holds 8.5% of the flagship chipmaker, and Samsung C&T Corp, which owns 5%.
The majority of the late chairman's assets were a 4.18% stake in Samsung Electronics, worth about 15 trillion won ($13.3 billion), which the family is expected to try to inherit entirely.
Heir apparent Jay Y. Lee's direct stake in Samsung Electronics is just 0.7% but he exercises control primarily through his 17.3% stake in Samsung C&T, which in turn is the second-largest shareholder of Samsung Life Insurance - a major shareholder of Samsung Electronics.
HEFTY INHERITANCE TAX If the family inherits Lee's stocks, the total tax bill is estimated to top 10 trillion won ($9 billion). It can be paid in instalments; one-sixth must be paid initially, then the rest over five years, meaning annual payments can exceed $1 billion.
MONEY TO PAY THE TAX
The Lee family can sell their stocks in information service provider Samsung SDS and other non-core affiliates to pay the tax.
Dividends totalling about 702 billion won a year from their combined holdings in Samsung affiliates can also be used, which will add up to about 32% of the annual tax bill, according to Choi Nam-kon, an analyst at Yuanta Securities.
The shortfall may have to be covered with loans or partial sales of stakes they hold or will inherit in Samsung Life Insurance and Samsung Electronics.
"The view is that selling part of the stake in Samsung Electronics during the inheritance process may be unavoidable," said Jeong Dae-ro, analyst at Mirae Asset Daewoo Securities.
Such stake sales could weaken the family's direct control of Samsung Electronics.
LEGAL OBSTACLES
Proposed legislation making it tougher for insurance companies to hold large stakes in non-financial affiliates relative to their assets could force Samsung Life to sell about $20 billion in shares in Samsung Electronics and cripple the Lee's family's grip on the chipmaker.
To ensure the Lee family keeps control, Samsung Life may try to sell its stake to Samsung C&T, which would in turn unload stakes in other units to come up with the funds.
The passage of the law remains uncertain as it could be unpopular with retail investors ahead of a presidential election in early 2022.
Reuters
Tue Oct 27 2020

The majority of the late chairman's assets were a 4.18% stake in Samsung Electronics, worth about 15 trillion won ($13.3 billion), which the family is expected to try to inherit entirely. REUTERS file pic

Russia lays out demands for talks with US on Ukraine, sources say
Russia has presented the U.S. with a list of demands for a deal to end its war against Ukraine and reset relations with the US, sources say

Astro launches Max on the Ultra and Ulti Box, bringing more premium entertainment options to Malaysian homes
Astro, Malaysias leading content and entertainment provider, today announced that Max, the premier streaming service from Warner Bros.

Duterte takes responsibility for Philippines drug war, anticipates long ICC battle
Former Philippine President Rodrigo Duterte said he takes full responsibility for his administration's "war on drugs"

Canada announces plan to ease Syria sanctions
The Canadian government on Wednesday announced plans to ease sanctions on Syria during what it called a period of transition.

Zii Jia pulls out of Swiss Open due to injury
Malaysia's men's singles shuttler Lee Zii Jia has withdrawn from next week's Swiss Open due to a recurring right ankle injury.

MCMC probes man for uploading fake content on social media
A 47-year-old Malaysian man is being investigated for allegedly uploading fake content that touches on the 3R (religion, race and royalty) on social media.

KPDN calls on public to help report bottled cooking oil shortage
The Ministry of Domestic Trade and Cost of Living (KPDN) has urged the public to be the eyes and ears of the ministry and report shortages of bottled cooking oil in their areas.

ICJ to hold public hearings on Israel's obligations in occupied Palestinian territory
The International Court of Justice will hold hearings next month on Israel's obligations towards Palestinians, Anadolu Ajansi (AA) reported.

Anwar: Sapura Energy's rescue plan excludes former shareholders
Prime Minister Datuk Seri Anwar Ibrahim said Sapura Energy Bhd's (SEB) former major shareholders are no longer involved in the company's management as part of its restructuring efforts.

Intel names Lip-Bu Tan as new CEO
Intel Corporation (INTC.O) has appointed semiconductor Malaysian-born industry veteran and former board member Lip-Bu Tan as its new CEO.

Ismail Sabri at MACC HQ to give statement
Former Prime Minister Datuk Seri Ismail Sabri Yaakob was at the Malaysian Anti-Corruption Commission (MACC) headquarters here today to give his statement

Duterte could face up to 30 years or life imprisonment if convicted by ICC - Malacanang
Former Philippines President Rodrigo Duterte could face up to 30 years or life imprisonment if convicted of crimes against humanity by the International Criminal Court (ICC)

Clarification on the investment in Sapura Energy by MDH
Permodalan Nasional Berhad (PNB) as the existing significant shareholder of SEB.

Floods recede in Beaufort, but residents remain wary of downstream water flow
While floods in Beaufort are receding, residents remain on alert for downstream water flow that could bring floodwaters from inland areas.

Govt to ensure establishment of SEGiM aligns with introduction of Gig Workers Bill
The government intends to ensure that the establishment of the Malaysian Gig Economy Commission (SEGiM) is in line with the introduction of the Gig Workers Bill.

UK steel industry warns of damage as Trump tariffs come into force
US President Donald Trump's tariffs on UK steel "couldn't come at a worse time," the industry has warned as the levy on US imports is introduced, reported PA Media/dpa news.

Penang allocates RM49.45 million for Phase 1 of i-Sejahtera Programme
The Penang government has allocated RM49.45 million for 274,151 recipients under Phase 1 of the i-Sejahtera Programme this year.

PM Anwar calls on all parties to be agents of unity, help unite people of different races
Prime Minister Datuk Seri Anwar Ibrahim has called on all Malaysians to join hands to become agents of unity and assist the MADANI Government in its efforts to unite all Malaysians

Women representation in senior management fall to 36.2 pct in 2025
The Grant Thornton Women in Business Report reveals a concerning decline in the representation of women in senior management positions in Malaysia.

Singapore Airlines prohibits usage, charging of power banks from April 1
Singapore Airlines (SIA) passengers will not be allowed to use power banks or charge them throughout their flight effective April 1.