April 26, 2024

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[THE INVESTOR] The Chairman of the National Pension Service Moon Hyung-pyo was summoned on Dec. 27 by the independent counsel team on the suspicion of having pressured the National Pension Service to favor the merger between Samsung C&T and Cheil Industries last year, when he was welfare minister.

Moon was summoned as a witness but may turn into a suspect during the investigation, according to local news reports.

Before entering the office of the special counsel, Moon denied the alleged influence-peddling, saying, “I will explain it all during the investigation.”

When asked if backing the merger had helped him become chief of the NPS, he replied, “That is nonsense.”

In May last year, the announcement of a merger between Samsung’s two affiliates with a ratio of 0.35 Cheil shares per Samsung C&T share had stoked strong opposition from advisory firms which said Samsung C&T’s share was excessively undervalued.

Despite the opposition and speculations of foul play, the NPS -- then the largest shareholder of Samsung C&T -- cast a vote for the merger in July, without convening a special committee consisting of professional outside advisors.

The special investigation team suspects President Park Geun-hye’s longtime friend Choi Soon-sil had pressured Moon to back the deal in return for financial support provided by Samsung. A month after the NPS’ vote, Samsung Electronics signed a consulting agreement amounting to 22 billion won ($18 million) with Widec Sports -- an entity controlled by Choi -- in Germany.

On Dec. 27, the main opposition Democratic Party of Korea called for Moon to resign as the NPS chief, claiming the Samsung deal caused a loss of around 300 billion won to the public pension fund.

“The special investigation team is viewing that the NPS suffered such a loss because Moon was unduly involved in the controversial deal,” said Rep. Hong Ik-pyo of the Democratic Party. 

By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)