Samsung Electronics chairman Lee Jae-yong is set to receive 11.16 million shares in the company from his mother, Hong Ra-hee, in a gift worth about 2.6 trillion won ($1.8 billion). Samsung disclosed the planned handover in a regulatory filing on Tuesday, and it will enlarge the direct stake Lee holds in the country’s biggest company.
The block amounts to 0.17 per cent of Samsung Electronics. Its value is calculated on Tuesday’s closing price of 232,000 won a share. Lee currently owns 105.22 million shares, equal to 1.58 per cent, and will hold 116.38 million shares, or 1.75 per cent, once the transfer goes through. Hong, an honorary director of the Leeum Museum of Art in Seoul, will see her own holding shrink from 0.99 per cent to 0.82 per cent.
The shares are due to change hands on November 12, and the gift comes with a large tax bill attached. Under the rules that apply, the tax will be worked out from the average closing price over the two months before the transfer date and the two months after it. That means the final amount Lee owes is not expected to be fixed until early next year. Using Tuesday’s closing price alone, the levy would come to an estimated 1.55 trillion won.
Tuesday’s filing followed a separate deal between mother and son only a day earlier. On Monday, Lee bought 7.19 million Samsung Electronics shares from Hong in an off-market transaction valued at about 1.92 trillion won. That sale was widely seen as a way for Hong to raise cash to cover her tax payments, leaving the share gift as the second large movement of Samsung stock within the family in the space of two days.
Industry officials expect “limited market impact” from the two transactions, because the shares stay inside the controlling family and the overall shift in ownership is small. The practical effect is concentrated at the top of the group. Both deals add to the shares Lee holds in his own name, and together they strengthen his control over Samsung as he takes a larger personal slice of its flagship company. The final tax figure will depend on how Samsung Electronics shares trade in the weeks either side of the November 12 transfer.
