April 20, 2024

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[THE INVESTOR] Elliott Management on May 3 expressed disappointment and questioned why the Korean prosecution chose to revive a dormant probe and has summoned its officials on charges of violating disclosure rules back in 2015 when it acquired a stake in Samsung C&T.

The US hedge fund found it fishy that details of the probe were leaked to the press right after it indicated its intention to seek compensation through an investor-state dispute settlement for what it calls “unlawful intervention” by the Korean government and the National Pension Service in the Samsung merger. 

On May 2, authorities were seen speeding up the investigation that was launched two years ago, with the prosecution saying it summoned Elliott officials, adding that it remains to be seen whether they would show up as most of them are staying overseas at the moment.

Below is an official statement from Elliott Management.

"As a foreign investor in the Republic of Korea, Elliott notes with concern that details of a confidential and long-dormant investigation were suddenly leaked to the press just hours after Elliott confirmed that it is seeking compensation relating to the unlawful intervention by the former administration and the National Pension Service in the merger of Samsung C&T and Cheil Industries.

With regards to the press articles concerning the investigation by the Seoul Southern District Prosecutor’s Office (PPO), Elliott used swaps lawfully and in a manner consistent with Korean law. 

It is therefore not surprising that the ROK Financial Supervisory Service, after examining the matter with substantial information and assistance from Elliott, chose not to file any enforcement action itself. 

Elliott has cooperated with the PPO and provided detailed information to assist it in understanding the matter. Elliott also notes that this investigation has been pending since 2015, yet has now once again suddenly been thrust into the spotlight only when Elliott is publicly trying to vindicate its rights and the rights of minority shareholders generally."

By Lee Ji-yoon (jylee@heraldcorp.com)