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The Money Issue

Samsung’s Founding Family Faces a $7 Billion Estate Tax

The chairman’s heirs risk losing control after paying the taxman.

Jay Y. Lee, vice chairman of Samsung Electronics Co., in 2013.

Jay Y. Lee, vice chairman of Samsung Electronics Co., in 2013.

Photographer: Scott Eells/Bloomberg
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The lives of the rich and famous are news fodder everywhere. But in South Korea it’s an expected death that has the country enthralled. The country’s wealthiest person, the 77-year-old chairman of tech giant Samsung Electronics Co., has been incapacitated since a 2014 heart attack, and the local press frequently speculates about his health: “He’s Breathing,” “Death Rumor,” “Who Has the Details?” In court two years ago his son said, “When the chairman was alive,” then corrected himself: “When the chairman was healthy.”

The reason for the obsession? When Lee Kun-hee dies, his heirs will face an estate tax of almost $7 billion, and paying it may complicate the family’s control of the Samsung conglomerate. Lee’s net worth is about $15 billion, according to the Bloomberg Billionaires Index, and his beneficiaries would likely have to sell some of the inheritance to cover the tax—diluting their stake in Samsung. The company dismissed rumors about the chairman, saying he is in stable condition and not on life support, and that when he dies the family will pay all the taxes it owes.