Samsung boosts dividends as family faces giant tax bill
It also announced a new increased three-year shareholder return programme.
SEOUL (AFP) - Samsung Electronics on Thursday announced plans for a huge one-off dividend payment for shareholders with its controlling family facing a multi-billion-dollar inheritance tax bill.
Chairman Lee Kun-hee, the richest man in South Korea, left his children a monumental fortune when he died in October, along with a tax tab reported to be more than $10 billion.
The group’s flagship subsidiary Samsung Electronics said it would give a "one-time special cash dividend" to shareholders on top of the regular payment -- and more than four times higher -- as part of its full-year results.
It also announced a new increased three-year shareholder return programme.
Analysts say the plan will help the Samsung heirs -- including Samsung Electronics vice-chairman and de facto leader Lee Jae-yong -- pay the gargantuan tax bill.
Under South Korean law, Lee Kun-hee’s estate is taxed at 50 percent -- plus a 20 percent surcharge on stocks he held as the largest shareholder in a firm.
Reports have estimated that around 11.4 trillion won ($10.2 billion) in inheritance taxes will be due on the late patriarch’s stock assets alone.
"Samsung C&T is one of the biggest shareholders of Samsung Electronics and Lee Jae-yong is the biggest shareholder of Samsung C&T," said Kim Dae-jong, a business professor at Sejong University.
"Around 2,000 won per share is an astonishing amount and it will greatly ease the burden of inheritance tax," he added.
Samsung reported a 26 percent jump in fourth quarter net profit from a year earlier, but warned of ongoing uncertainties over the pandemic, and lower profits in the first quarter of 2021 owing to falling prices.
Lee Jae-yong is currently in prison after he was sentenced to two and a half years last week in a retrial over a sprawling corruption scandal, a ruling that analysts say could complicate the decision-making process for the world’s biggest maker of smartphones and memory chips.
