FILE PHOTO: People walk past a spider sculpture by artist Louise Bourgeois at the Samsung Group's Leeum Gallery in Seoul on June 22, 2012.Kim Hong-Ji/Reuters
A South Korean art critic was astounded when he saw the private art collection of Lee Kun-hee, the late Samsung Electronics chairman, after being asked to value it this year.
“The reason many go to the Louvre is to see the Mona Lisa, and the Sistine Chapel, the Creation of Adam. There are valuable masterpieces that can compare to that in the Lee collection,” said the critic, who declined to be identified.
The head of the Samsung conglomerate died in October, leaving an art collection estimated to be worth more than US$1.76-billion, including masterpieces by Picasso, Monet and Warhol, the critic and another person directly involved in the appraisal told Reuters.
Former culture ministers and art groups have called for a new law that would allow the family to donate the art in lieu of at least part of the US$9.72-billion bill for inheritance tax for listed stock holdings alone the family is expected to face.
The aim is to keep the collection in South Korea for exhibition. Putting it up for auction would inevitably mean much going overseas, they say.
“If we don’t have a system in place allowing tax payment by artwork, we’ll lose the collection,” said Lee Kwang-soo, president of the Korean Fine Arts Association.
The family’s law firm, Kim & Chang, has engaged three art groups to appraise the collection, which includes Korean treasures.
According to the two people involved in the appraisal, the collection of about 12,000 items includes works covering the “flow of Western art history” by Renoir, Chagall, Alberto Giacometti, Rothko, Gerhard Richter and Damien Hirst, with some pieces valued at more than US$88-million.
The collection’s total price tag of an estimated US$1.76-billion or more far exceeds the US$835.1-million that the Rockefeller collection sold for at Christie’s in 2018.
The two people involved in the appraisal declined to be identified as the proceedings were private. Kim & Chang declined to comment.
Mr. Lee had a particular collection philosophy as he accumulated over about 40 years, wrote Lee Jong-seon, a former deputy director of the Samsung Group’s museum, the Leeum Gallery, who helped Mr. Lee build his collection, in his book Lee Collection.
His father, Samsung founder Lee Byung-chul, preferred ancient Korean art and did not buy items he deemed too expensive. But Lee Kun-hee “did not weigh the price”, rather thinking: “If there are masterpieces, the status of the entire collection will rise.”
“Lee Kun-hee’s philosophy was to aim for masterpieces ... I think his collection philosophy also translated into Samsung’s management ideology of being No. 1,” Mr. Lee wrote.
The Lee family is expected to report on the inheritance tax bill by April.
The family is expected to try to pay the bill in instalments over five years in an effort to retain his shareholdings in Samsung affiliates to maintain control of the conglomerate, in particular global tech giant Samsung Electronics.
Some countries allow taxes to be paid with artwork and offer tax breaks for art donations but not South Korea, said lawyer Park Joo-hee, who specializes in the arts.
Art experts blame the lack of such tax rules for leaving South Korea’s National Museum of Modern and Contemporary Art “without even a single Picasso engraving.”
The president of Art Market Research Institute, So Jin-su, said that based on the budget for artwork bought by South Korean museums in 2019, it would take the entire museum network up to 132 years to buy the Lee collection.
Draft legislation was introduced after Mr. Lee’s death but there has been little progress on it. Even if passed, it is not clear if the family would want to donate the collection in return for tax breaks, given the sums it might fetch, experts say.
Choe Byong-suh, visiting professor at Sungkyunkwan University, said he hoped some arrangement could be worked out to keep the collection in South Korea.
“This is a rare chance to establish a landmark museum,” he said.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.