Facing $11b bill, Samsung family donates art treasures

SEOUL, South Korea－Samsung's founding family will donate tens of thousands of rare artworks, including Picassos and Dalis, to help them pay a massive inheritance tax bill following last year's death of company chairman Lee Kun-hee.

They will also give hundreds of millions of dollars to medical projects and research in an apparent attempt to improve their public image as they proceed with a multiyear plan to inherit both the wealth and corporate power of South Korea's richest businessman.

The Lee family, including his widow and three children, expects to pay more than 12 trillion won ($10.8 billion) in inheritance taxes, which is more than half the wealth Lee held in stocks and real estate, Samsung said on Wednesday. This would be the largest amount in South Korea and more than three times the country's total estate tax revenue for last year.

Giving away the late chairman's vast collection of art masterpieces would reduce the taxable portions of his estate.

The family plans to divide the payment in six installments over five years. They had until Friday to report the extent of the inheritance and payment plans to tax authorities.

Raising cash for the tax payment is crucial for the Lee family to extend its control over Samsung's business empire, which extends from semiconductors, smartphones and TVs to construction, shipbuilding and insurance. Some analysts say the process could result in a shake-up across the group.

The late Lee owned 4.18 percent of Samsung Electronics, which is one of the world's biggest makers of computer memory chips and smartphones, but also held stakes in Samsung affiliates that collectively owned a larger share than his in the crown jewel electronics company. The complex shareholding structure has allowed Lee and his family to exert broad control over the group.

In Wednesday's statement, Samsung did not mention how Lee's widow and children would split his assets, and there's speculation they haven't reached a final agreement.

Most market analysts believe Lee's shares will be distributed in a way that would strengthen the leadership of his only son and corporate heir Lee Jae-yong, who is currently imprisoned for bribery and other crimes. Lee's other children are Lee Boo-jin, CEO of Samsung's Shilla luxury hotel chain, and Lee Seo-hyun, who heads the Samsung Welfare Foundation.

Picassos and Dalis

The family plans to donate 23,000 art pieces from Lee's personal collection to two state-run museums. They include old Korean paintings, books and other cultural assets designated as national treasures. There are also the works of Marc Chagall, Pablo Picasso, Paul Gauguin, Claude Monet, Joan Miro and Salvador Dali, Samsung said.

Hwang Hee, South Korea's culture minister, said some of the art donated by Lee will be displayed for the public starting in June. He expressed "deep gratitude" to the Lee family for "enriching" the country's cultural assets, but he sidestepped questions on whether he thought Samsung was trying to create a positive atmosphere for Lee Jae-yong to get pardoned.

Agencies via Xinhua