[THE INVESTOR] Korea’s largest pension fund National Pension Service is considering issuing an apology for voting in favor of the controversial merger of two Samsung companies three years ago, according to industry sources on April 9.
“The NPS has decided to apologize over its Samsung vote in order to regain trust from the public,” an official said. “A new operational roadmap will also be announced soon based on the results of the ongoing inspection that may come out in May.”
The NPS’ backing played a key role in approving the merger of Samsung C&T and Cheil Industries back in 2015. Samsung touted business synergies of the deal, but some minority shareholders of Samsung C&T, including the activist fund Elliott Management, resisted it citing an unfavorable merger swap ratio.
Amid speculations that the merger would help Samsung Electronics Vice Chairman and heir apparent Lee Jae-yong strengthen his control over group companies, the NPS, the largest shareholder of Samsung C&T with an 11 percent stake, voted for the merger to be approved. The deal is estimated to have cost at least 138.8 billion won (US$130 million) losses for the pension fund.
A special prosecutors’ investigation found later that former President Park Geun-hye’s close aide Choi Soon-sil, protagonist of the snowballing corruption scandal, had pressured the then Health Minister Moon Hyung-pyo to back the deal in exchange for business favors from Samsung.
Moon -- along with Hong Wan-sun, the former asset management chief at the NPS -- was sentenced to 2 1/2 years in prison for abusing his power and causing damage to the pension fund.
By Lee Ji-yoon (email@example.com)