Samsung family decides on W1tr donation to boost medical sector

The founding family of Samsung Group will donate 1 trillion won ($899 million) to bolster the country’s medical infrastructure, including building Korea’s first hospital for infectious diseases, Samsung Electronics announced on Wednesday.

The announcement was part of the bereaved family’s plan on inheritance tax payments on assets of the late Samsung Chairman Lee Kun-hee, who died on Oct. 25.

The Lee family has decided to donate 700 billion won to better equip the medical sector in tackling infectious diseases, in light of the current situation of the COVID-19 pandemic, Samsung Electronics said in a statement.

The donation will first go to the National Medical Center that will be in charge of executing the fund with related institutions.

The majority of the offering, 500 billion won, will be spent on launching a new hospital specialized in infectious diseases, which will be the first of its kind in Korea, it said.

The hospital for infectious diseases will have cutting-edge facilities, including negative pressure rooms and 150 beds.

Some 200 billion won is earmarked for establishing a national research institute for infectious diseases under the Korea Diseases Control and Prevention Agency.

The family will also provide 300 billion won to support children with cancer and rare diseases through the Seoul National University Children’s Hospital.

Some 150 billion won will be used for supporting treatments of 13 kinds of childhood cancer, including leukemia and lymphoma, while 60 billion won will be used for kids fighting 14 kinds of rare diseases like Crohn’s disease.

Samsung expects the donation to benefit around 12,000 children suffering from cancer, and 5,000 kids with rare diseases over the next 10 years.

“Chairman Lee had paid keen interests in improving the country’s medical infrastructure, especially paying more attention to children’s treatments,” a Samsung official said.

The late chairman once said, “One of companies’ missions is to raise quality of mankind’s health and life.”

Regarding the estimated 12 trillion won in inheritance tax, the family said, “Tax payment is a due duty, and what we have to do.”

Nearly 60 percent of the late chairman’s assets, including stocks of Samsung affiliates and real estate, will be paid as inheritance taxes in six installments over a five-year period, starting this month.

The breakdown on specific shares of Lee’s assets that will be passed on to each family member, including the eldest son Lee Jae-yong, will be revealed through regulatory filings by each Samsung affiliate.

How much of the 20.76 percent share in Samsung Life Insurance would be given to the junior Lee is still drawing the most attention from the market.

The massive inheritance tax is likely to trump duties paid elsewhere.

The bereaved family of former Apple CEO Steve Jobs paid an equivalent of 3.4 trillion won in inheritance taxes.

In Korea, LG Corp. Chairman Koo Kwang-mo is paying off a total of 921.5 billion won across a span of five years, since his father’s death in 2018.

Lotte Chairman Shin Dong-bin’s inheritance tax is estimated to be around 300 billion won.

By Song Su-hyun (song@heraldcorp.com)