South Korean financial regulatory division has announced that it investigating a possible inside trading scenario in the hostile take-over which included the cheil industries and Samsung C&T. the regulators have mentioned that a possible deception, inside trading and share manipulation might have been committed in this merger.
A news agency reported that as many as 9 key executives from Samsung have purchased cheil industries stock Intune of $43 million in the month of April and May. Co-incidentally Samsung announced a deal that combines cheil and Samsung C&T shortly after that. this gave the executives unfair control over the deal and the shares of Samsung’s founding family soared after the announcement.
Samsung is declining to comment on this issue owing to the fact that the investigation is still in an infant stage.
Cheil industries, having acquired Samsung C&T for $8 billion, helped the heir-apparent lee jae yong to snatch the control of business from his ill father who has been hospitalized since last year.
When Samsung made an announcement of this deal, the cheil shares soared and enabled the majority holder(lee) to gain more control of Samsung’s other key businesses. As a result of this deal, lee now has a stake of 4% in Samsung crown jewel, Samsung electronics.
The shareholder such as U.S. hedge fund Elliott Associates tried to block the deal through legal means but the deal went through and the two companies were merged together. They argue that this deal would result in giving unfair advantage and control to the Samsung founding family.
Stay tuned for more details on this developing story.
