In an annual parliamentary audit of the Ministry of Strategy and Finance (MOSF), held on September 15, Rep. Park Young-sun of the main opposition New Politics Alliance for Democracy (NPAD) argued, “Samsung C&T’s total assets were worth 12 trillion won but they were undervalued at 9 trillion won at the time of the merger between Samsung C&T and Cheil Industries. On the other hand, Cheil Industries’ assets, worth 5 trillion won, were extremely overvalued at 22 trillion won.
The merger between the two is nothing a smokescreen put up by Samsung Chairman Lee Kun-Hee’s three children, who had no stake in Samsung C&T, to inherit Samsung C&T through Cheil Industries.
With Samsung C&T’s assets undervalued and Cheil Industries’ overvalued, the merger proceeded, so the three children of Chairman Lee Kun-Hee enjoyed a tax-free asset growth of 2-3 trillion won, according to Rep. Park.
“The fundamentally unfair merger deal benefitted only the three children of Chairman Lee while the National Pension Service (NPS) suffered a loss of 1.5 trillion won and minority shareholders of Samsung C&T also suffered losses. The unfair merger has fattened the three children’s wallets with the public’s money,” Rep. Park added.
“Former South Korean President Chun Doo-hwan extorted money from the public at gunpoint. The three is no different from President Chun except that it was a gunless extortion,” Rep. Park criticized.
According to Rep. Park, Lee’s three children, Samsung Electronics Vice Chairman Lee Jae-yong, Hotel Shilla President Lee Bu-jin and Cheil Industries' fashion division president Lee Seo-hyun, inherited assets worth 15 trillion won but only Lee Jae-yong paid 1.6 billion won in inheritance and gift taxes.
“The three inherited assets worth 15 trillion -- 2.7 trillion won from Samsung pubic foundations, 2 trillion won from the Cheil-Samsung C&T merger and 10 trillion won from Chairman Lee Kun-Hee selling Samsung SDS bonds with warrants at artificially low prices to his son. However, only Lee Jae-yong paid taxes,” Rep. Park pointed out.
“The Cheil-Samsung C&T merger has caused considerable controversy around the world, but MOSF and the National Tax Service (NTS) are sitting on their hands. And much of the press remains silent about it,” Rep. Park argued.
