Shares of companies that are part of the Samsung Group climbed amid speculation that the family-controlled conglomerate might raise dividends at some units following the death of Samsung Electronics Co chairman Lee Kun-hee, to help his heirs raise funds to pay the inheritance tax.
Samsung C&T Corp was up 13 percent at the close in Seoul, the biggest gain since 2015, after surging as much as 21 percent. Jay. Y Lee, the first son, holds a large stake in the de facto holding company of South Korea’s largest conglomerate.
Samsung Life Insurance Co and Samsung SDS Co rallied 3.8 percent and 5.5 percent respectively.
Lee Kun-hee’s heirs are estimated to have to pay about 10.9 trillion won (US$9.66 billion) in inheritance tax, Korea Investment & Securities Co said in a note.
Samsung Life might raise dividends considering that it holds stakes in Samsung Group financial units that are generating solid profits, Korea Investment analyst Yoo Jong-woo said.
While dividend hikes alone might not be enough for the family to foot the tax bill, they are “a rational way to raise cash,” Macquarie Investment Management Korea chief investment officer for equities Jeon Kyung-Dae said.
“It needs to be seen whether the units have the capacity to raise payouts,” he said. “The deceased chairman had been hospitalized for a long time, so the Samsung Group must have prepared a plan for succession.”
Meanwhile, South Korea’s billionaire business leaders yesterday lined up to pay respects to Lee Kun-hee, who died aged 78 on Sunday, six years after suffering a heart attack that had left him bedridden.
Under his leadership, Samsung became the world’s largest producer of smartphones and memory chips, and the firm’s overall turnover is equivalent to one-fifth of South Korea’s GDP.
It is by far the largest of the chaebols that dominate business in the country.
Attendance at Lee’s mourning ritual — which runs until tomorrow — would be kept low because of the COVID-19 pandemic, Samsung said.
However, a series of top politicians and tycoons arrived at the Samsung Medical Center in Seoul to pay tribute to Lee Kun-hee yesterday, including Hyundai Motor Group chief Chung Eui-sun and Korean Air Lines Co chairman Cho Won-tae.
“It’s very sad that a great man has passed away,” Chung told reporters, praising Lee Kun-hee’s leadership “across entire fields of the country’s business community.”
The Hyundai group, founded by Chung’s grandfather, is South Korea’s second-biggest chaebol.
Ruling Democratic Party chairman and former South Korean prime minister Lee Nak-yon also praised the late Samsung chief for his “superb innovation that is unimaginable to an average man.”
“I want to thank him for elevating the country’s status and pride,” he said.
Other attendees included the US and Chinese ambassadors, whose countries are at loggerheads over trade and other issues.
The chaebols drove South Korea’s transformation from war-ravaged ruin to the world’s 12th-largest economy, but have long been accused of murky political ties and stifling competition.
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