South Korea: Samsung executives probed for possible insider trading
Samsung’s executives are being investigated for possible insider trading ahead of a contentious takeover deal, South Korea’s financial regulator said on Friday.business Updated: Dec 04, 2015 12:52 IST
Samsung’s executives are being investigated for possible insider trading ahead of a contentious takeover deal, South Korea’s financial regulator said on Friday.
Kim Hongsik, director of the capital markets investigation unit at the Financial Services Commission, said the country’s stock exchange reported the suspected insider trading or share manipulation.
Seoul-based Yonhap News reported that nine Samsung executives purchased as much as 50 billion won ($43 million) of Cheil Industries stock before Samsung announced a deal to combine Cheil and another Samsung company in May.
Shares of Cheil, which has members of Samsung’s founding family as majority shareholders, surged after the announcement.
Kim said the investigation was related to the deal but declined to discuss other details because the matter was under investigation.
The Cheil Industries and Samsung C&T deal was contested by some minority shareholders of Samsung C&T who questioned its fairness.
The most outspoken opponent was Elliott, a US hedge fund, which eventually lost its legal fights to stop Samsung from combining the two companies.
Elliott argued the deal unfairly benefited Samsung’s founding Lee family and other shareholders at Cheil at the cost of shareholders at Samsung C&T.
The fight between Elliott and the electronic giant drew international attention as Samsung’s campaign was at one point criticised by Jewish organisations for depicting Elliott’s founder as a ravenous, big-beaked vulture.
Samsung C&T narrowly won a shareholders vote in July and completed the merger. The combined entity, named Samsung C&T, has Samsung Electronics’ vice chairman Lee Jae-yong as the majority shareholder giving him effective control of its 4% share in Samsung Electronics, the Samsung group’s crown jewel.