This article was published on Aug. 12, 2025, at 3:34 p.m. on the ChosunBiz MoneyMove site.
Ulsan National Institute of Science and Technology (UNIST) has become a shareholder in Duksan Neolux, a KOSDAQ-listed company with a market capitalization of 900 billion won. This follows a donation of 2.68% equity from founder Lee Jun-ho, the honorary chairman. Prior to this donation, the honorary chairman had gifted over 50,000 shares on Nov. 5, 2023, bringing UNIST's total equity stake to approximately 3%.
The honorary chairman had pledged to donate 30 billion won to UNIST in 2021. Donating stocks in kind, like this honorary chairman did, is a rare occurrence. Industry insiders believe that the honorary chairman gained a tax reduction benefit by donating stocks instead of cash. Transferring stakes in a listed company as a gift allows the donor to receive a tax deduction based on market value without the burden of transfer taxes for major shareholders. Additionally, since Duksan Neolux is a subsidiary located at the bottom of the governance structure, this equity sale does not affect the owner family's control.
◇ 30 billion won worth of equity donated... rare stock donation in kind
According to the investment banking (IB) industry on the 12th, the honorary chairman donated 666,609 shares (2.68%) of Duksan Neolux to UNIST on the 31st of last month. This is worth approximately 27 billion won at market value on that day.
This honorary chairman's stock donation marks the second instance since November of last year. At the time, the honorary chairman donated 59,182 shares (0.24%) of Duksan Neolux, bringing the total equity transferred over the two donations to 2.92%. This equates to a market value of 30 billion won.
This honorary chairman's donation is the largest donation since UNIST was established in 2009. He stated, "When I started my business in Ulsan more than 40 years ago, I faced numerous trials in a harsh environment. I hope my juniors will face fewer difficulties and be able to challenge the world market." His generous act of donating hundreds of millions of won for his hometown juniors serves as a model case.
It is unclear whether UNIST still holds the donated stocks. However, since they have indicated the donation will be used for entrepreneurship education and nurturing advanced technology personnel, it can be inferred that they do not plan to hold the stocks long-term and will likely liquidate them at an appropriate time.
It is rare for donations to be made in kind as stock, as was the case with this honorary chairman. While there was a case where Kakao founder Kim Beom-soo donated over 100 billion won to Brian Impact, it should be noted that Brian Impact is a public foundation established by Chairman Kim. This case differs from that of the honorary chairman who donated stocks to a school.
◇ Save on transfer tax and increase tax credit
Industry insiders believe that the honorary chairman may have achieved tax reduction benefits by donating stocks rather than cash. When an individual donates listed shares in kind to a university (public corporation), the donation amount is calculated based on the market value at the time of the donation (if there is no special relationship). Moreover, since the stocks were not sold, no capital gains tax will be incurred.
Conversely, if a major shareholder sells stocks for cash donations, capital gains tax on the profit arises first, which typically reduces the actual amount available for donation as well as the deductible amount. The tax credit rate for individual donations is 15% for amounts up to 10 million won and 30% for amounts exceeding that.
For example, if one bought 100,000 shares (worth 5 billion won) at 5,000 won each, and the current market value is 30,000 won (worth 30 billion won), selling the stocks for cash donation would yield about 671 million won in transfer tax (profit of 2.5 billion won), leaving 2.329 billion won as the basis for the tax credit calculation. Applying the individual donation tax credit rate (15% for amounts up to 10 million won and 30% for excess amounts), the available tax credit would be approximately 700 million won.
However, if the stocks are donated in kind, no capital gains tax will arise, and based on regulations for evaluating personal in-kind donations (the larger amount of market value or book value), the full amount of 30 billion won will be the basis for calculating the deduction. The estimated deduction amount is approximately 898.5 million won.
The honorary chairman donated stocks at both the time of stock rebound in 2023 and this time. During the first donation on Nov. 1, 2023, Duksan Neolux's stock price had significantly rebounded from its yearly low, and the same was true on July 31 of this year. Since the donation occurred when the stock price, which serves as the basis for calculating the donation amount, was high, the valuation of the donation and the scale of the tax credit could have both increased as a result.
◇ Subsidiary at the bottom of the governance structure... no impact on management rights
Furthermore, by donating shares of Duksan Neolux among subsidiaries, the honorary chairman minimized the impact on the overall group's governance structure.
The largest shareholder of Duksan Neolux is Duksan Hi Metal (36.67%). The governance structure of Duksan Group follows this sequence: 'Eldest son Chairman Lee Soo-hoon → Duksan Holdings → Duksan Hi Metal → Duksan Neolux and Duksan Nepcores.'
In addition, Duksan P&B is controlled by Chairman Lee Soo-hoon and Duksan Holdings, which also controls Duksan Tescs and Tigris Investment. Therefore, since Duksan Neolux is at the bottom of the governance structure, donating about 3% of its equity by the honorary chairman does not have any significant impact.
The industrial image of the donated assets aligns well with the purpose of the donation. Duksan Neolux is an advanced materials company that develops and produces OLED organic materials. UNIST announced that it would allocate the donation for expanding hands-on entrepreneurship education, nurturing regionally tailored advanced technology personnel, and strengthening industry-academia cooperation. This message aligns well with the intention to expand Ulsan's industrial structure, traditionally focused on petrochemicals, automobiles, and shipbuilding, into new industries such as semiconductors, displays, AI, and bioengineering.