Samsung’s Controlling Family Sells $1.1bn in Shares to Pay Tax Bill

The shares on sale matched the amount Hong Ra-hee, mother of Samsung Electronics vice chairman Jay Y Lee, agreed to keep in trust

 

Samsung Electronics shares worth about $1.1 billion were sold in a block deal on Thursday, which some analysts attributed to the conglomerate’s controlling family raising cash to meet a big tax bill.

About 19.9 million Samsung shares were sold by Kookmin Bank at 68,800 won per share, a discount of 2.4% to Wednesday’s closing price of 70,500 won, a term sheet of the deal showed.

Samsung Electronics did not have a comment on the sale.

But the shares on sale matched the amount that Hong Ra-hee, mother of Samsung Electronics vice-chairman Jay Y Lee and wife of deceased Samsung patriarch Lee Kun-hee, agreed to keep in trust with Kookmin Bank, according to a Samsung filing.

The trust agreement period was due to end by April 25, the filing showed.

Since Lee died in 2020, Samsung’s controlling family decided to use shares in affiliated companies to pay part of more than $10 billion in inheritance tax, people with direct knowledge of the matter have said.

The tax code allows payment in instalments, with one-sixth of the total to be paid first, and the remainder over five years with an annual interest rate. Even in instalments, analysts expect over 2 trillion won ($1.64 billion) to be due annually.

“The owner family is likely to sell additional shares to secure funds for inheritance tax,” Choi Kwan-soon, an analyst at SK Securities, said.

Samsung Electronics’ share price fell 0.8% to 69,800 won in afternoon trading, versus a 0.5% fall in the wider market. The stock has lost more than 11% this year. Goldman Sachs, JPMorgan and Kookmin were bookrunners for the sale.

 

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.