Seoul rejects Elliott’s $20 mn claim against Samsung C&T

The lawsuit is separate from Elliott's legal dispute with the South Korean government

Seoul rejects Elliott’s mn claim against Samsung C&T
Yong-Hoon Kwon 2
2024-09-27 17:28:03 fact@hankyung.com
Shareholder activism

Elliott Investment Management Corp. has lost a case against Samsung C&T Corp. in seeking 26.7 billion won ($20.2 million) compensation in connection with the latter's merger with Cheil Industries Corp. in 2015.

The Seoul Central District Court on Friday rejected Elliott’s claim that Samsung C&T owed it 26.7 billion won, the difference between the price Samsung paid to the US activist fund and to other shareholders opposing the Samsung arms' combination when buying back their shares.

In 2015, Elliott initially agreed to sell Samsung C&T shares back to the company at 57,234 won apiece on the condition that it would be compensated for any difference between Samsung’s share buyback prices.

It was the second-largest shareholder of Samsung Group's de-facto holding company with a 71.2% stake and protested the merger.

Samsung C&T is a construction company operating the Everland amusement park (Courtesy of Samsung C&T)
Samsung C&T is a construction company operating the Everland amusement park (Courtesy of Samsung C&T)

In May 2022, Elliott received an additional 72.4 billion won from Samsung C&T, the difference between its disposal price of 57,234 won and the 66,602 won endorsed by the Supreme Court of Korea in April 2022.

Elliott complained about the compensation. It argued the additional payment reflected only the period between September 2015 and March 2016, during which it had disposed of Samsung C&T shares. It claimed Samsung discriminated against it compared to other shareholders, for which the payment included the almost seven-year period from September 2015 and May 2022.

But the district court turned down such claims.

Samsung Group Chairman Jay Y. Lee
Samsung Group Chairman Jay Y. Lee

The saga of legal disputes surrounding the controversial merger between Samsung C&T and Cheil Industries lingers, involving Samsung Group Chairman Jay Y. Lee, the South Korean government and the National Pension Service.

Elliott has brought the case to the International Center for Settlement of Investment Disputes (ICSID) and the tribunal partially accepted its claim for compensation, including the accrued interest and legal costs, in 2023.

But South Korea's justice ministry has taken counter legal action to challenge the ICSID's decision to pay $53.6 million to Elliott.

In February, the Seoul Central District Court cleared Samsung’s Lee of charges of illegal activities related to the Samsung C&T-Cheil Industries merger, which ended up tightening his grip over the world’s largest chipmaker Samsung Electronics Co.

Write to Yong-Hoon Kwon at fact@hankyung.com

Yeonhee Kim edited this article.
#ElliottInvestmentManagement #SamsungC&T #SeoulCentralDistrictCourt #InternationalCenterforSettlementofInvestmentDisputes #ICSID

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