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Factbox: Key points of Samsung's Lee family legal spat
(Reuters) - Samsung Electronics (005930.KS) Chairman Lee Kun-hee will defend three lawsuits on Wednesday from family members claiming ownership of $1 billion worth of assets - in a case that could upset plans for a smooth succession at the group.
Lee Kun-hee owns 41.52 million shares, or 20.76 percent, in Samsung Life (032830.KS), an insurance unit that sits at the heart of a web of Samsung Group shareholdings. Unlisted zoo operator Samsung Everland owns 38.7 million shares, or 19.34 percent of Samsung Life, which, in turn, is the biggest shareholder of Samsung Electronics, the jewel in Samsung Group.
Following are key summaries of the plaintiffs' demands.
* Lee Maeng-hee, the eldest son of Samsung founder Lee Byung-chull, argues that Kun-hee secretly inherited 4.5 trillion won ($3.8 billion) worth of assets, mainly Samsung Life shares, from their late father without telling other siblings who are also entitled to some of the assets.
* In 1998, Everland and Kun-hee acquired a majority of the Samsung Life shares they now own from Lee Byung-chull for 9,000 won each, far cheaper than the prevailing market price of 700,000 won, according to legal documents filed by the plaintiffs. Ten years later, Kun-hee changed the ownership of the remaining Samsung Life shares to himself from his late father. Samsung Life shares closed on Tuesday at 955,000 won.
* Maeng-hee demands 8.24 million Samsung Life shares from his younger brother, and 100 Samsung Life shares from Everland. He also seeks 20 Samsung Electronics shares from Kun-hee.
* Lee Sook-hee, Kun-hee's elder sister, is seeking 2.23 million Samsung Life shares and 20 Samsung Electronics shares from Kun-hee, and 100 Samsung Life shares from Everland. Combined, the two are seeking around 25 percent of their younger brother's stake in Samsung Life.
* Offspring of Samsung's founder's second son - Lee Chang-hee, who died in 1991 - are seeking a small portion of Samsung Life shares from both Kun-hee and Everland.
The ownership of $3.8 billion worth of assets, mainly Samsung Life shares, came into focus following a tax probe into Kun-hee after he transferred the shares owned in nominee accounts into his own name. That investigation came after a whistleblower, Samsung's former top lawyer, alleged the group was keeping billions of dollars in slush funds. Lee and Samsung denied the claims, which prosecutors said they couldn't establish. Kun-hee was eventually indicted on tax evasion charges but was pardoned by South Korea's president.
Samsung Group has 17 listed and 64 unlisted companies with interests from electronics and construction to hotels and fashion. The way in which the Lee family exercises control over the group was exposed in 2008-09 court hearings on those tax charges.
According to court documents seen by Reuters, Kun-hee's secretarial office managed his 4.5 trillion won in assets in more than 1,000 nominee accounts and reported the latest financial status to Kun-hee once or twice a year. His lawyers said at the time that these accounts were primarily used to protect management control over Samsung Group, not to increase investment return or avoid taxes on financial gains.
In 1996, a board meeting of unlisted Samsung Everland saw eight people approve a plan to sell 9.95 million won ($8,500) worth of convertible bonds. At the time, the firm had equity capital of 3.5 billion won and no pressing need for cash.
To make the bond issue legally binding, Samsung Everland needed at least half its 17 board members seated. Her Tae-hak, who was CEO and board chairman at the time, declared that 9 members, including one who was on an overseas business trip, were present, according to the court documents.
Two weeks later, on November 14, they met again to approve placing 97 percent of the bonds - which could be converted into Everland stock at less than one tenth of the market value - to Kun-hee's four children, including Jay Lee who was studying overseas. An hour later, the four paid for the subscription and became top shareholders of Samsung Everland, with a combined 64 percent stake in what is de facto the holding company for the entire Samsung Group. Jay Lee is Everland's largest shareholder.
In early 1999, unlisted Samsung SDS, which offers IT services for Samsung Group companies, went through similar steps and sold bonds with warrants to the four children, again at a far cheaper price than the market value.
(Reporting by Miyoung Kim; Editing by Ian Geoghegan)
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