The Korea Herald


Korea faces another compensation claim over 2015 Samsung merger

By Jie Ye-eun

Published : April 12, 2024 - 17:17

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A Samsung flag flies outside its office building in southern Seoul. (Yonhap) A Samsung flag flies outside its office building in southern Seoul. (Yonhap)

The South Korean government faced another compensation claim for its alleged role in the 2015 merger of two Samsung companies.

The Hague-based Permanent Court of Arbitration ruled Thursday that the Korean government should compensate some $32.03 million to Mason Capital, a New York-based hedge fund, for its investment losses from the high-profile merger deal. Mason had originally demanded to be compensated with $200 million.

The latest arbitrative ruling is the second of its kind made against the Korean government in the Samsung merger case.

Back in 2015, Samsung C&T and Cheil Industries were merged based on the stock value of each firm at that time. But the two US hedge funds Mason and Elliott Investment Management, which owned 2.18 percent and 7.12 percent, respectively, in Samsung C&T, opposed the deal, citing an “unfair” share-swap ratio.

In September 2018, Mason filed a lawsuit against the Korean government, claiming that the state-run National Pension Service, Samsung C&T’s largest shareholder, approved the deal to help Samsung’s founding family extend their control over Samsung companies.

Thursday's ruling comes after the PCA last year ordered the Korean government to pay Elliot about $108.5 million in the same merger case, about 7 percent of what the firm had originally claimed.

The Korean government immediately filed a suit to appeal the ruling, saying that the claims were baseless considering Samsung Electronics Chairman Lee Jae-yong, the then heir apparent, was cleared of charges of being involved in illegal activities related to the 2015 merger.

Regarding the latest arbitrating ruling, Korea’s Justice Ministry said it will closely review the case and announce its future actions soon.