LS Group founding family members have transferred 33 billion won worth of stocks to their relatives taking advantage of low stock prices amid the pandemic, a move seen by many as efforts to drastically reduce the government's imposition of a gift tax.
According to the Financial Supervisory Service (FSS), since May the LS Group owners have passed a total of 959,000 LS shares to their children and other relatives. LS Group's owner family holds 4.7 million of the conglomerate's shares, and 20.3 percent of the total shares were transferred to relatives on May 11 and 12.
| LS Group Chairman Koo Ja-yeol |
Other conglomerate-related families have also taken advantage of the low stock prices to transfer a substantial amount of shares to their family members. GS Retail CEO Huh Yeon-soo gave 192,000 shares to his son on April 28 and 80,000 shares to his nephew on May 12.
It is uncommon for owner families to give large sums of shares to their relatives. Share prices saw a significant drop due to the COVID-19 pandemic.
| LS Mtron Chairman Koo Ja-eun |
"It seems the owner families have been waiting for the stock prices to drop and use it as a means to save money on the gift tax," an official at the Citizens' Coalition for Economic Justice (CCEJ) said.
In LS' case, even a seven-year-old relative was gifted 18,000 shares worth 646 million won as of May 11 and will be eligible to receive dividends worth 26 million won, when putting into calculation last year's dividend payout.
"They should be criticized for passing down their fortune even towards a child who cannot make his own decisions," an official from CCEJ said. LS Group separated from LG Group in 2003.