A PYMNTS Company

US/South Korea: Elliott faces probe over alleged violation in Samsung merger

By  |  February 25, 2016

US activist investor Paul Singer’s Elliott Associates faces a disclosure probe over an alleged violation of local rules when it tried to block merger of two Samsung Group affiliates last year. South Korea’s local regulations mandate that a trader issue a public disclosure within five days of acquiring over 5% in a listed company.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    As detailed by ValueWalk, last year Samsung Electronics Co Ltd’s controlling Lee family won a merger of two Samsung affiliates by a thin margin. However, before the shareholder vote on July 17, Elliott initiated a fierce campaign against the merger proposal, arguing that the merger would only benefit shareholders of Cheil Industries, in particular, the Lee family.

    Earlier, the Seoul High Court rejected an appeal filed by Elliott Associates to block the Samsung C&T merger. The hedge fund contended that the merger would be unfair and unlawful and significantly damage the interests of Samsung C&T shareholders.

    Paul Singer’s $27 billion hedge fund initially held a 4.95% stake in Samsung C&T’s construction company. Elliott boosted its stake in the company to 7.12% and launched an opposition to the merger between Samsung C&T and Samsung Group’s holding company Cheil Industries.

    It was felt that Elliott Associates violated a local law that mandates public disclosure within five days of acquiring over 5% in a listed company. Korean authorities suspected that Elliott already controlled the increased number of shares through a total return swap negotiated with brokerage houses before the June 2 disclosure.

    Full content: Finance Asia

    Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.