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Jean-Michel Basquiat was inspired by black boxers, African sculpture and racial discrimination when he produced “Untitled (Black Figure)” in 1982, one of the many masterpieces in which he opened new paths in art.
That same year, Lee Kun-hee it guided Samsung’s leading engineers toward how to transfer millions of metal-semiconductor oxide transistors to a single computer chip, a new process that would help underpin the great advances in modern technology.
Although the American painter and the Korean industrialist, who died in October 2020, were separated by the world, they have been inextricably linked. Basquiat’s shocking canvas is located between the homes of an immense property Lee’s wife and three children are considering separating as they work out plans to pay a $ 12 billion estate tax bill.
The bill, which comes from South Korea’s 60% highest inheritance tax, the highest in the OECD, exposes the rapidly widening rift between the country’s ultra-rich citizens and ordinary citizens. .
“They have benefited society to become so rich,” said Chang Sung-ja, a 56-year-old woman in the southern city of Suncheon who, with her husband, drives people home after ‘to have been drinking. “People like us can’t even imagine the amount of their wealth.”
Lee, son of the founder of Samsung who ran South Korea’s largest company, was revered for a long time as a helmsman whose successes helped pluck an impoverished nation from the ashes of a brutal war and convert -la in a technological power.
But for many South Koreans today, the wealth of the Lee and that of others chaebol families who dominate the county’s business landscape and exert a strong political influence – have become divisive. The lives of privileges and excess of the elites contrast with the ongoing battle of most workers struggling to reach both ends.
Despite the approaching tax deadline, neither the family nor Samsung have commented on how the tax will be paid, beyond privately insisting that the money owed be accounted for in full and on time. The prison in January of Lee Jae-yong, the son of the late president who now heads Samsung, for bribery charges related to his own succession, has further complicated the family’s public relations problems.
According to analysts and commentators, the most likely scenario is for payments to be spread over five years under a complex structure that will reshape the family’s fortune.
Park Ju-geun, head of research firm CEO Score, said the first payments were expected to be made through large bank loans using his stakes in Samsung units as collateral.
Given that the wealth of the late patriarch is mostly tied to a network of stakes in companies in the Samsung group, it is also expected that different listed units will distribute higher dividends to help strengthen the monetary position of the family.
But towards the end of the five-year period, the family will likely still have to divest some of its stakes in Samsung companies, a prospect that increases the risk that its protection against the conglomerate may be loosened.
According to Park and others familiar with the situation, the sale or donation of the art collection and the restructuring of the family’s interests through charitable foundations are also being discussed. The collection, estimated at 13,000 pieces and valued at $ 2.7 billion, includes works by Pablo Picasso, Andy Warhol and Mark Rothko, as well as works by Korean artists Park Soo-keun and Lee Jung-seob.
Chung Joon-mo, head of the country’s art assessment center and former curator of the National Museum of Modern and Contemporary Art, supports allowing tax credits if the works are donated to state museums.
“They are already in talks with museums and have almost made the decision,” Chung said, adding that the donation would be welcome given the “limit on purchasing expensive works of art with state budgets.”
Others, however, oppose the family using art donations to reduce their tax bill. “Why can’t they pay the bill in cash? They have a lot of money, ”said Im Han-kyu, a 55-year-old cleaner. “That wouldn’t make a big difference in their livelihoods because money makes money.”
Inheritance tax regimes vary around the world, but South Korea’s highest rate is in the higher end of the scale internationally.
The Lee family’s fiscal problems are part of an ongoing broader shift as succession and inheritance battles threaten to transform markets in various parts of Asia.
In Japan, for example, generational changes in business ownership and control are driving one private capital interest boom which has secured all the largest funds in the world to settle in Tokyo.
Japan is not only the world’s most aging major economy, but also has the highest concentration of business founders arriving in the late 1970s and looking for a structured way out of the businesses they spent decades building.
The profile of companies and their executives is crucial to this boom, which privately held companies believe will eventually replicate across Asia as different economies, such as South Korea, catch up with the demographics of the Japan.
Back in Seoul, however, Samsung still enjoys a solid fan base. People, from business leaders to monks, have in recent days called for Lee Jae-yong to be released from prison by a presidential pardon. The family hopes the gift of works by artists like Basquiat will remind the public of their contributions to society and consolidate acceptance for a third generation of Lee’s leadership.
Additional reports from Emma Agyemang in Copenhagen
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