Stock disposal in ‘dilemma’ by pressure of Fair Trade Commission…Samsung under concern of circular investment
Park Jung Il | comja77@ | 2018-02-27 11:25:16
Samsung SDI is expected to sell 4.40mn shares in Samsung C & T within six months, and Samsung`s solvency issue is expected to rise again. The government is also demanding a plan for the reorganization of domestic large corporations until the shareholders` general meeting in March. Lee Jae-yong, vice chairman of Samsung Electronics, came back with a big assignment.
The Fair Trade Commission demanded until August 26 to dispose of 4.04 million shares (2.1 percent) of Samsung C & T Co., Samsung SDI regarded 904,000 shares of Samsung C & T Co., Ltd., which was acquired at the time of the merger of Samsung C & T and Cheil Industries in 2015, as the formation of a new circular investment structure.
As a result, Samsung SDI has disposed of 5mn shares, which stood at 2.6% in Samsung C & T in 2016, and the remaining 404mn shares should be disposed of until the end of August. It reached KRW 541.7 billion last closing price on February 23. Samsung SDI said it would consider whether it will dispose of the decision within the grace period regardless of whether it is in court or not.
But inside Samsung, there is also a voice of dissatisfaction. It is pointed out that it is necessary to restructure the governance structure such as the conversion of holding company, and at the same time it has blocked the way to simplify the governance structure.
What Samsung is doing with the stock of 500 billion won right now is a big task for Samsung. Currently, Samsung C & T`s largest shareholder is 39.38% (or less common stock), so even if Samsung SDI owns 2.13% of its stakes, there is no big problem in governance. However, if this quantity comes out directly to the market, the stock price will inevitably collapse. This is also difficult if other affiliates purchase shares in order to prevent this from happening.
Besides, the Samsung Chairman Kim Sang-Joo is pushing the chairman of the fair. Kim said he would consider imposing sanctions and regulations in the second half of the year if the business community does not voluntarily reform until the March meeting. In this case, problems such as solving the circulating investment structure can be entered.
However, it is difficult to find a way to improve the governance structure by shifting to a holding company unless the merger is the same as Samsung Corp.`s merger given Samsung`s current conditions. Currently, Samsung`s corporate governance structure is largely composed of three parts, namely Samsung Electronics, Samsung Life Insurance and Samsung C & T Corporation. The ring is so strong that it costs tens of trillion won to organize it. For example, if the Fair Trade Commission (FTC) urges Samsung to eliminate its circulating investment structure, Samsung Life and Samsung F & M should hold a 9.72% stake in Samsung Life Insurance. In order to solve the circulating investment structure, it is practically impossible for the largest shareholder, such as the vice chairman, to purchase the stake. If you just sell it to the market, Samsung Electronics` largest stake in the company will fall to 10.50%.
As a result, Samsung Electronics has been reportedly worried about how to merge with Samsung C & T and share it with holding companies. However, Samsung Electronics has abandoned propulsion of a holding company, saying, "We have recently decided to divide the shares of Samsung Electronics Co., Ltd. and the foreign CEOs and women "It is the best shareholder-friendly policy we can make in terms of Samsung," said Lee.”If the government puts pressure on the issue of circulating capital right now, there will be no way to do so, which will deepen the concerns of the vice chairman and Samsung."
By Park Jung Il comja77@
[ copyright ⓒ The Digitaltimes ]
The Fair Trade Commission demanded until August 26 to dispose of 4.04 million shares (2.1 percent) of Samsung C & T Co., Samsung SDI regarded 904,000 shares of Samsung C & T Co., Ltd., which was acquired at the time of the merger of Samsung C & T and Cheil Industries in 2015, as the formation of a new circular investment structure.
As a result, Samsung SDI has disposed of 5mn shares, which stood at 2.6% in Samsung C & T in 2016, and the remaining 404mn shares should be disposed of until the end of August. It reached KRW 541.7 billion last closing price on February 23. Samsung SDI said it would consider whether it will dispose of the decision within the grace period regardless of whether it is in court or not.
But inside Samsung, there is also a voice of dissatisfaction. It is pointed out that it is necessary to restructure the governance structure such as the conversion of holding company, and at the same time it has blocked the way to simplify the governance structure.
What Samsung is doing with the stock of 500 billion won right now is a big task for Samsung. Currently, Samsung C & T`s largest shareholder is 39.38% (or less common stock), so even if Samsung SDI owns 2.13% of its stakes, there is no big problem in governance. However, if this quantity comes out directly to the market, the stock price will inevitably collapse. This is also difficult if other affiliates purchase shares in order to prevent this from happening.
Besides, the Samsung Chairman Kim Sang-Joo is pushing the chairman of the fair. Kim said he would consider imposing sanctions and regulations in the second half of the year if the business community does not voluntarily reform until the March meeting. In this case, problems such as solving the circulating investment structure can be entered.
However, it is difficult to find a way to improve the governance structure by shifting to a holding company unless the merger is the same as Samsung Corp.`s merger given Samsung`s current conditions. Currently, Samsung`s corporate governance structure is largely composed of three parts, namely Samsung Electronics, Samsung Life Insurance and Samsung C & T Corporation. The ring is so strong that it costs tens of trillion won to organize it. For example, if the Fair Trade Commission (FTC) urges Samsung to eliminate its circulating investment structure, Samsung Life and Samsung F & M should hold a 9.72% stake in Samsung Life Insurance. In order to solve the circulating investment structure, it is practically impossible for the largest shareholder, such as the vice chairman, to purchase the stake. If you just sell it to the market, Samsung Electronics` largest stake in the company will fall to 10.50%.
As a result, Samsung Electronics has been reportedly worried about how to merge with Samsung C & T and share it with holding companies. However, Samsung Electronics has abandoned propulsion of a holding company, saying, "We have recently decided to divide the shares of Samsung Electronics Co., Ltd. and the foreign CEOs and women "It is the best shareholder-friendly policy we can make in terms of Samsung," said Lee.”If the government puts pressure on the issue of circulating capital right now, there will be no way to do so, which will deepen the concerns of the vice chairman and Samsung."
By Park Jung Il comja77@