Big Decision
The National Pension Service (NPS) pushed back its decision on the merger between Samsung C&T and Cheil Industries. In addition, it still remains up in the air whether the matter will be dealt with by its internal investment committee or the voting rights advisory committee of outside experts.
The organization’s hesitation is because it is the stockholder that holds the key to what has become a face-off between Elliott Management and the Samsung Group. With the NPS increasing its shares in the top 30 Korean conglomerates, its decision is expected to have an impact on the national economy as a whole, as well as Samsung in particular.
“The NPS postponed its investment committee meeting on July 9, which means that outside experts are now more likely to come in,” an industry insider remarked, adding, “Still, it seems that the scope of the specific issues to be handled by the experts has yet to be clarified.”
At present, Institutional Shareholder Services, which provides voting rights consultation for the NPS, is opposed to the merger. The Korea Corporate Governance Service and the Canada Pension Plan Investment Board, which owns 0.15 percent of shares, are against it, too. The voting rights advisory committee, in the meantime, raised an objection to a merger between SK and SK C&C last month, calling the rate of the merger into question.
Its hesitation is also because of the intervention of Elliott Management, which is criticized as an “eat-and-runner.” If the NPS approves of the merger, it can be seen as siding with the conglomerate. If it disapproves, it may be criticized as overlooking the outflow of national wealth.