South Korea: US fund seeks damages for Samsung merger

New York-based hedge fund Mason Capital Management has filed a legal claim seeking at least US$175 million from the South Korean government as compensation for damages it says it sustained from a 2015 merger of two Samsung Group affiliates, reported the Financial Times.

Its action follows a similar move by US activist fund Elliott Management, which in May initiated an international legal process to seek US$670 million in compensation from Seoul over its role in the merger of Samsung C&T and Cheil Industries.

Seoul’s justice ministry said on Tuesday, July 3, that Mason Capital filed a notice of intent on June 7, seeking a resolution through the Investor-State Dispute Settlement mechanism.

The hedge fund claimed in the notice that it suffered huge losses due to Seoul’s undue influence over the decision of the country’s state-run pension fund in the merger process and Seoul’s act was in breach of South Korea’s free trade agreement with the US. The National Pension Service, a key shareholder of Samsung C&T, supported the contentious deal, blocking Elliott’s attempt against the US$8 billion merger.