Samsung must sell shares by Aug.
Published: 26 Feb. 2018, 20:29
The Fair Trade Commission (FTC) has set the legal grounds to force Samsung SDI to sell its 4.04 million shares in Samsung Group’s de facto holding company Samsung Construction & Trading (C&T).
The antitrust agency said Monday it would take legal action including fines if Samsung SDI does not sell the stake in Samsung C&T by Aug. 26.
The FTC came to the conclusion that a new cross-shareholding structure was created after the merger of Samsung C&T and Cheil Industries on Sept. 1, 2015, making Samsung SDI’s investment illegal.
During the merger in December 2015, the antitrust agency ordered Samsung SDI to sell 2.6 percent stake or 5 million shares of the total 9 million shares it had in Samsung C&T, allowing it to retain the remaining 4.04 million shares.
The key issue at the time was whether the merger created a new cross shareholding structure or not.
The FTC concluded that the merger strengthened Samsung SDI’s influence on Samsung C&T but it did not create a new cross-shareholding structure, which would have been deemed illegal under a regulation adopted in 2014.
It appears that ruling was the result of pressure by the Park Geun-hye Blue House on the FTC and allowed the founding family of Samsung Group to retain its control of affiliates while owning small stakes in each.
After the Moon Jae-in administration came to power last May the antitrust agency has been led by former civic activist and economics professor Kim Sang-jo, known to be critical of big conglomerates and their practices including complex cross-shareholdings among affiliates.
BY LEE HO-JEONG [[email protected]]
The antitrust agency said Monday it would take legal action including fines if Samsung SDI does not sell the stake in Samsung C&T by Aug. 26.
The FTC came to the conclusion that a new cross-shareholding structure was created after the merger of Samsung C&T and Cheil Industries on Sept. 1, 2015, making Samsung SDI’s investment illegal.
During the merger in December 2015, the antitrust agency ordered Samsung SDI to sell 2.6 percent stake or 5 million shares of the total 9 million shares it had in Samsung C&T, allowing it to retain the remaining 4.04 million shares.
The key issue at the time was whether the merger created a new cross shareholding structure or not.
The FTC concluded that the merger strengthened Samsung SDI’s influence on Samsung C&T but it did not create a new cross-shareholding structure, which would have been deemed illegal under a regulation adopted in 2014.
It appears that ruling was the result of pressure by the Park Geun-hye Blue House on the FTC and allowed the founding family of Samsung Group to retain its control of affiliates while owning small stakes in each.
After the Moon Jae-in administration came to power last May the antitrust agency has been led by former civic activist and economics professor Kim Sang-jo, known to be critical of big conglomerates and their practices including complex cross-shareholdings among affiliates.
BY LEE HO-JEONG [[email protected]]
with the Korea JoongAng Daily
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