A few months ago, we published a short profile of the Lee family in South Korea. It told of the origins of Samsung Electronics Co., one of the world’s largest companies. Today, Samsung is a $300 billion conglomerate with tentacles in not only consumer electronics, but also shipbuilding, hospitality and resorts, construction, advertising, and even life insurance.
Our profile also highlighted some of the challenges facing the Lees, including the incapacitation of Samsung chairman Lee Kun-hee, the 77-year-old son of the company’s founder, and South Korea’s wealthiest person. Lee’s condition has left the family scrambling to address a leadership transition far sooner than expected.
In recent months, the speculation amongst the business community in South Korea has ramped up even further.
- Lee Kun-hee’s current health is uncertain; he hasn’t been seen in public since his heart attack in 2014, and some even wonder if he’s still alive.
- The big news for the family (and the business) is that when Lee dies, his heirs will face an estate tax of nearly $7 billion. Paying this tax will likely complicate the family’s control of Samsung, as it may be necessary for Lee’s beneficiaries to sell off certain pieces of the company in order to cover the estate bill. This would dilute their stake in Samsung.
- All of this is due to South Korea’s estate tax rate of 50%, second-highest in the world after only Japan.
- Succession will be an additional problem, as none of Lee’s four sons (including Jay Y. Lee, one of the current vice-chairmen at Samsung) have nearly the stature of their father in Korean business.
And you thought your life was complicated?
Read the latest on the Lee family’s estate challenges in this article in Bloomberg Businessweek.
Read our full story on Samsung here