With the death of Samsung chairman Lee Kun-hee, a new era for the conglomerate has started with his son and vice chairman, Lee Jae-yong.
The younger Lee has been leading Samsung since his father suffered a heart attack back in May, 2014.
South Korea’s Fair Trade Commission has designated Lee Jae-yong as the leader of Samsung in 2018.
The heir-apparent faces many challenges before he can cement his position as leader of South Korea’s largest business group.
He faces trial for stock manipulation charges and must restructure the ownership structure of Samsung.
Lee Kun-hee owned around 249 million shares (for a 4.18% stake) as well as preferred stock of around 619,900 shares (0.08% stake) of Samsung Electronics. He also owned 9701 shares (0.86% stake) in Samsung SDI, 5.42 million shares (0.48% stake) in Samsung C&T and 41.51 million shares (20.76% stake) of Samsung Life Insurance.
Transfer and inheritance taxes of over 1 trillion won is expected to be levied when these shares pass on to his family. A premium rate of 20% for Samsung Life Insurance shares can also be expected.
Vice chairman Lee controls Samsung C&T, which in tern controls Samsung Life Insurance, which in turn controls Samsung Electronics.
Lee has said back in May that he will make sure the succession issue no longer causes controversy.
The South Korean majority party is seeking to make amendments to local insurance laws to limit ownership of insurance companies of non-financial companies. The law will force Samsung Life Insurance and Samsung Fire to sell their Samsung Electronics shares except for those worth 3% of their total assets. This will force them to sell 20 trillion won worth of shares. This will also force them to pay a corporate tax of 22%.
Samsung has been embroiled in dispute with hedge fund Elliot Management over the merger of Samsung C&T and Cheil Industries, which threatened the Lee family’s control over the conglomerate.
The younger Lee also faces two simultaneously trials. It will take awhile for him to restructure the company to wrap up the succession.