The owner family of LS Group recently bequeathed about 33 billion won ($27 million) worth of shares to children and relatives, regulatory filings showed Monday.
The move by the South Korean conglomerate came as stock prices of its affiliates have plunged in the wake of the COVID-19 pandemic, which allows them to pay lower gift taxes.
Group Chairman Koo Ja-yeol, LS-Nikko Copper Chairman Koo Ja-hong, LS Cable & System Chairman Koo Ja-yub and heads of other units have given a total of 959,000 LS shares to their children and relatives since May.
The donation was made on May 11 and 12 when stocks plunged about 25 percent on-year -- a total of 4.73 million shares worth 33.5 billion won based on average share price of 34,900 won. It accounted for 20.3 percent of the combined shares the leaders held.
Koo Ja-yeol gifted 100,000 shares to his two daughters. Koo Ja-hong gave 60,000 shares each to his two nephews. Koo Ja-yub handed over a total of 127,000 shares to his sons and relatives.
The youngest family member in the donation list was a 7-year-old surnamed Lee. She received 18,000 shares worth 646 million won based on the closing price on May 11. Accordingly, the youngest heir will be able to receive dividends worth 26 million won starting this year.
Another conglomerate, GS Group’s owner family was also found to have donated shares to progeny in April and May.
GS Retail CEO Huh Yeon-soo gave 192,000 shares to his son on April 28, while his older sister Huh Yeon-ho gave 80,028 shares to her son on May 12.
GS shares also fell by more than 20 percent during the two months in the wake of the pandemic.
Local civic groups have accused the chaebol family members of exploiting legal loopholes.
“Giving (the shares) as soon as their prices fall if they had been waiting for the moment is a ‘trick’ to reduce their gift taxes,” contended Kwon Oh-in, economic policy director of the Citizens’ Coalition for Economic Justice. He also took issue with the stock handover to minors who “cannot make their own decisions.”
In response, LS Group said, “We don’t know in detail about the donation. But, we understand it was not related to the fall of stock prices.”
By Shin Ji-hye (
shinjh@heraldcorp.com)
