Seoul ordered to pay Elliott $53.6M over 2015 Samsung merger

South Korea has been ordered to pay hedge fund Elliott $53.6 million in damages over the controversial 2015 merger of two Samsung affiliates, Seoul’s justice ministry said Tuesday.

Around seven percent of Elliott’s claim for about $770 million was accepted by the International Centre for Settlement of Investment Disputes, the ministry said in a statement.

The arbitration tribunal also ordered the South Korean government to pay the US activist investor delayed interest as well as $28.9 million in legal expenses, the ministry added.

Elliott sued the South Korean government in 2018 after losing a proxy fight opposing the merger between Cheil Industries and Samsung C&T.

Elliott — C&T’s second-largest single shareholder in 2015 — had argued that the takeover willfully undervalued the construction firm’s share price, at an unacceptable cost to its shareholders.

The merger transaction was seen as helping ensure a smooth third-generational power transfer to Lee Jae-yong, a scion of Samsung’s founding family. He currently serves as the executive chairman of Samsung Electronics.

The deal went through after the state-run National Pension Service (NPS) — C&T’s biggest shareholder — approved it.

A corruption scandal subsequently showed that the NPS sided with Samsung as it was pressured by the presidential office, headed by then-president Park Geun-hye.

Former health minister Moon Hyung-pyo was eventually convicted of abuse of power for pressuring the NPS to vote for the merger and was sentenced to a jail term.

Park was impeached in 2017 after weeks of mass rallies calling for her ouster for corruption and abuse of power.

She and Samsung’s Lee were both convicted of bribery but were given special pardons.

cdl/caw

© Agence France-Presse

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