The Underground Emperor: Starting with Running Away with His Sister-in-Law

One group belongs to foreign financial giants, mostly from Wall Street; another belongs to South Korea's own national funds, such as the social security fund; and the last group belongs to the business families that created these chaebol groups!

A once-thriving conglomerate was split into three major parts...

This has also led to a sharp decline in the equity held by the founders of those conglomerates.

Like Chen Yangzhe, the former chairman of Shunyang Group.

After 1997, he only owned 28% of the shares in Shunyang Group.

certainly...

Leaving aside those foreign financial giants who only have the right to receive dividends, the shares held by Chen Yangzhe are enough to ensure that he has absolute control over Shunyang Group!

And at that time, Shunyang Group...

The overall shareholding structure is still tree-like, that is, the parent company Shunyang Properties is the foundation, holding equity in a large number of its subsidiaries.

Chen Yangzhe holds the shares of Shunyang Properties in his personal capacity.

at this time...

In fact, some founders of conglomerates, including Chen Yangzhe, have begun to think about how to preserve their control over the group, and even their descendants' control over the group!

After 2000...

Feeling unwell, Chen Yangzhe now faces the immediate challenge of choosing who will take over the Shunyang Group!

And at this time...

Another huge mountain stood in his way!

That's inheritance tax!

Taxes of up to 50 percent of the total estate are a burden that no wealthy family can afford!

If you honestly pay this money...

That basically means their own group or company is almost finished!

Or...

Even if a group or enterprise is large enough to sustain itself, it is highly unlikely that the family will continue to control the group after paying the inheritance tax.

What should we do?

There's a way!

The special technique of "cross-shareholding" thus came into being!

Chen Yangzhe's outrageous actions have begun...

on the one hand...

He seized the opportunity while he was still relatively healthy and began to use various means to gradually transfer some of his assets, including shares, to his relatives through subtle operations.

Some are distributed as dividends, some as gifts, and some through open market transactions...

certainly...

This portion of equity cannot be too large!

If there are too many, other problems will arise!

on the other hand...

He began working on cross-shareholding arrangements!

Simply put...

The parent company is A. A holds a majority stake in subsidiary B. B, in turn, holds a majority stake in company C. Company C, in turn, holds a majority stake in company D. Company D is a newly established company. Through a series of transactions, it acquired a portion of the shares of the parent company A.

During this process...

Chen Yangzhe will arrange for his children and relatives to join these companies and hold controlling stakes in them!

During this period, they will also secretly acquire two companies, Wu and Xu, which will be jointly funded and owned by the parent company and several other subsidiaries!

After operating for a period of time...

The parent company will directly withdraw its investment, allowing the other subsidiaries to gain absolute control of Companies E and Xu. After this, the market value will be restored, and then a share swap will be conducted with the parent company...

And so on, continuously performing micro-management...

......

Chapter 559 Inside Story

Amidst a series of dazzling operations...

Ultimately, the parent company's equity distribution will become incredibly complex. After removing foreign capital and domestic state-owned funds, the remaining equity distribution could even involve dozens of small businesses!

Although Chen Yangzhe personally retains control of the group's operations...

However, his personal shareholding in the parent company has been reduced from 28 percent to 5 percent!

certainly...

At this time, he still retained control over the entire Shunyang Group!

Because he also holds a portion of the shares in other subsidiaries, and those subsidiaries each hold controlling stakes in the parent company, which in turn holds controlling stakes in the other subsidiaries, thus creating a perfect closed loop!

This is already the limit of compression.

He couldn't possibly say that he converted all his personal shares into shares held by subsidiaries; that would clearly indicate something was wrong.

On the surface...

He has to maintain a portion of his personal shares in the parent company; this is for show.

certainly...

There is definitely a focus in the process of cross-shareholding!

For example, Chen Yongji, the second-generation chairman, was assigned the position of president of Shun Yang Steel before succeeding as chairman.

His personal shareholding in Shunyang Steel reached 35 percent, and after a complex operation, Shunyang Steel now owns 2 percent of Shunyang Materials.

At the same time, Chen Yongji also owns shares in several other lesser-known subsidiaries.

Interestingly...

Shortly before Chen Yangzhe passed away...

Several subsidiaries under his control were acquired by several subsidiaries held by Chen Yongji in a short period of time due to various problems.

And so on...

The Chen family members completed the smooth handover of Shunyang Group through this normal business transaction.

As a result, Chen Yongji directly or indirectly controlled 14 percent of the shares of Shunyang Properties, thus standing out and gaining control of the entire Shunyang Group.

It's complicated...

But in conclusion...

In the will left by Chen Yangzhe after his death, only the shares equivalent to 7% of the entire Shunyang Group and his personal assets, such as cash, antiques, jewelry, and real estate, worth a total of three trillion Korean won, could be distributed normally.

At that time, the market valuation of Sunyang Group was approximately 500 trillion won!

in other words...

After his series of actions...

This not only allowed the Chen family to smoothly take over the massive Shun Yang Group...

It also reduced the base amount for calculating the equity inheritance tax that should have been paid from 140 trillion won to 35 trillion won!

Calculated at a 50% inheritance tax rate...

The inheritance tax that was previously required was 70 trillion won, but now it is only 17.5 trillion won!

And this only covers taxes related to equity.

Let's talk about his personal assets, such as cash, antiques, jewelry, and real estate...

After decades of wealth accumulation...

How could his personal assets only amount to three trillion won?

According to Mu Xianmin's calculations...

It should be at least 20 trillion won!

in other words...

The tax liability for Chen Yangzhe's personal estate has also been increased from 10 trillion won to 1.5 trillion won.

In summary...

Chen Yangzhe's actions saved his children at least 60.5 trillion won!

Hearing this...

Ding Xin couldn't help but exclaim, "Good heavens, this is equivalent to saving the equivalent of four Kinmen Groups!"

However...