Wealth transfer among Korea's elite business families provokes a strong media and public response. Recent accusations against the Lee (Samsung) family and Chung (Hyundai-Kia) has drawn much attention in Korea. I've noted before that Korean taxes on wealth transfer are massive....much more than in America.
This article notes efforts by the family controlling Shinsegae to address the transfer taxes. Shinsegae, along with operating retail stores, own the Westin Choson in downtown Seoul and has the master franchise for Starbucks in Korea.
Korea media notes...
Shinsegae Co., operator of the country's largest discount store chain, recently saw a shareholder shake-up.
Chung Jae-eun, the honorary chairman of Shinsegae announced that he would transfer his entire 7.82 percent stake to his children, including Chung Yong-jin, company vice president, pushing his total shares to 9.32 percent with the additional 4.5 percent stake.
The honorary chairman's transfer is worth $700 million.
The transfer comes as the prosecution in May launched a probe into alleged illicit share transactions in Shinsegae suspected of aiding a wealth transfer from its chairwoman, Lee Myung-hee, to her son Chung Yong-jin.
The investigation followed a series of probes targeting illegal wealth succession schemes in chaebol, or family-controlled conglomerates, including Samsung Group and Hyundai Automotive Group.
To industry analysts, the latest wealth transfer has been interpreted as demonstrating the management confidence in the company's earnings outlook.
The transfer is a positive sign for the company, because it shows that Shinsegae believes that its current share is undervalued and they therefore earnings will improve.
NOTE Lee Myung-hee is married to Chung Jae-eun. Lee is sister to the current Samsung Chairman and is duaghter of the late Samsung founder. Lee and Chung's daugher is an executive at the family-controlled Westin Choson hotel.
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