[Edaily Reporter Kim Se-yeon] Kim Hyun-jung, CEO of #SP Samhwa (formerly Samhwa Paint Industry), appears to have taken steps to defend her management rights, even taking out a stock-backed loan to secure funds for inheritance taxes amounting to tens of billions of won. While the possibility of selling her stake has been raised, the current focus is on retaining her holdings.

According to SP Samhwa on the 2nd, CEO Kim signed stock-backed loan agreements totaling 8 billion won on two occasions: February 23 and May 26. On February 23, she borrowed 3 billion won using 1.2 million SP Samhwa shares as collateral, and on May 26, she borrowed 5 billion won using 1.8 million shares as collateral. The stock-backed loan agreement signed in February is essentially a continuation of an existing loan that the late Chairman Kim Jang-yeon had received from Korea Financial Securities.
Industry observers view the 5 billion won stock-backed loan signed last May as effectively intended to secure funds for paying inheritance tax. Inheritance tax must be reported and paid within six months from the end of the month in which the inheritance commences. This is interpreted as CEO Kim seeking to secure additional funds ahead of the payment deadline at the end of this month. An industry insider commented on CEO Kim’s loan agreement, stating, “The general view is that he took out the stock-backed loan to secure funds for inheritance tax.” An SP Samhwa official simply stated, “The disclosed stock-backed loan is a matter of personal financial management, so we cannot comment on it at the company level.”
Within the industry, concerns have been raised that CEO Kim’s stake could decrease during the inheritance tax payment process. CEO Kim inherited the entire stake following the sudden passing of the late Chairman Kim Jang-yeon, resulting in an inheritance tax bill in the tens of billions of won. Consequently, concerns have been raised that he might sell a portion of his shares to pay the tax. CEO Kim inherited 6,192,318 shares, and the inheritance tax he must pay amounts to 20.1 billion won.
Industry observers believe it is highly likely that CEO Kim will utilize the installment payment system rather than sell shares to defend her management rights. Currently, the second-largest shareholder is the family of the late former Chairman Yoon Hee-joong, a co-founder, whose stake is reported to have reached 20% as of the end of March. CEO Kim Hyun-jung’s stake stands at 25.8%, which is not significantly different from that of former Chairman Yoon’s family.
The installment payment system allows taxpayers to pay inheritance tax in installments over a period of up to 10 years, with a maximum of 11 payments, upon submission of an application. Utilizing this system reduces the need to dispose of shares to raise a large amount of cash in a short period.