The family of Samsung Electronics' chairman Lee Kun-hee held a funeral for the late patriarch on Wednesday as his death put the control of the chipmaker, and the largest conglomerate of the country, into question.

The spotlight is currently on the chairman's 52-year-old son, Jay Y. Lee, who is also the vice-chairman, on what kind of leadership he will exhibit despite facing serious legal risks coming from two trials seen stemming from efforts in ensuring that he will be succeeding his father.

One of the most powerful families in South Korea, the Lee family, now faces a challenge in maintaining the control of Samsung Group, which is the biggest conglomerate in the country after the death of the patriarch and group's chairman Lee Kun-hee, Reuters reported.

Potential legal obstacles and the astronomical inheritance tax bill are only some of the issues that the Lee family will be facing, as being one of the most powerful families is seeking to stay on top of the business empire founded in 1938.

Keeping the Fortune in the Family

The Lee family is expected to focus on maintaining control of the crown jewel of the conglomerate, the Samsung Electronics Co Ltd, but currently, the combined direct stake ownership of the family members is only at 5.8 percent.

According to Business Today, through their shareholding, the outsized control in Samsung Life Insurance was made possible by the family, which holds Samsung C&T Corp of 5 percent and 8.5 percent of the flagship chipmaker.

The majority of the assets of the late chairman were a 4.18 percent stake in Samsung Electronics that is worth $13.3 billion or 15 trillion won and is expected to be inherited by the entire family.

The direct stake of the apparent 52-year-old heir in Samsung Electronics is just 0.7 percent, but still, he is exercising his control due to the fact that he has a 17.3 percent stake in Samsung C&T, which is the second-largest shareholder of Samsung Life Insurance, the major shareholder of Samsung Electronics.

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Hefty Tax that comes with Inheritance

After the Lee family inherits the stocks of the late patriarch, the total tax bill will be an estimated $9 billion or 10 trillion won.

The payment can be put into installments; however, one-sixth of it should be paid initially, and the rest will be divided in five years, which means that the annual payments can exceed $1 billion.

Legal Struggles

 The proposed legislation made it tougher for insurance companies holding large stakes in non-financial affiliates relative to their assets which, could force Samsung Life to put an estimated $20 billion shares in Samsung Electronics in the market while crippling the grip of the Lee family on the chipmaker, The Star reported.

In order to secure the control of the Lee family, Samsung Life can sell its stakes to Samsung C&T, which in return could unload stakes in other units to combine for the funds.

The passage of the law remains unsure as it could be unpopular with retail investors ahead of a presidential election in 2022.

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