Samsung execs probed over the Cheil merger

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Samsung execs probed over the Cheil merger

The audit committee of the Korea Exchange launched an investigation into nine executives at Samsung affiliates who might have used internal information to purchase Cheil Industries shares before its merger with Samsung C&T, according to the stock market operator and financial authorities on Friday.

The nine executives are from up to four Samsung arms other than Cheil Industries and Samsung C&T, and include even those at the presidential level.

“It is routine to check if there are any noteworthy stock trading patterns among related employees before any mergers or acquisitions take place,” a source with the Financial Services Commission said. “We need to check if these were illegal transactions that utilized confidential information.”

The investigation is scheduled to wrap up early next year, and any irregularities discovered will be passed on to prosecutors.

Samsung made public the merger between the fashion arm and construction subsidiary on May 26, and stock prices of Cheil Industries subsequently shot up 15 percent, the daily limit.

In the month before the deal was unveiled, Samsung executives bought Cheil shares worth between 40 billion won ($35 million) and 50 billion won.

“The merger plan proceeded among a small number of top managers, so it’s nearly impossible that executives at other affiliates acquired the information,” a Samsung spokesman said.


BY SEO JI-EUN [seo.jieun@joongang.co.kr]

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