Facing More Intervention?
It has been pointed out that foreign investors in Samsung Electronics can increase their influence in the management of the company as vice chairman Lee Jae-yong has been sentenced to five years in prison.
As of June this year, the owner’s family members including the vice chairman and friendly shareholders have 19.86% of Samsung Electronics. Specifically, chairman Lee Kun-hee has 3.82%, his wife has 0.83%, and the vice chairman has 0.64%. In addition, Samsung Life Insurance, Samsung C&T, and Samsung Fire & Marine Insurance have 8.13%, 4.57%, and 1.42%, respectively.
In the meantime, the ratio of foreign shareholders, including PEFs, asset management firms, and hedge funds, is estimated at 53% or so.
The non-foreign shareholders have been able to maintain their control in spite of the relatively lower ratio because of the owner’s leadership and excellent business performance.
However, things can change if the absence of the vice chairman continues. For example, Elliott Management may call the merger between Samsung C&T and Cheil Industries into question again in two years. Last year, the American hedge fund demanded Samsung Electronics’ conversion into a holding company and listing on NASDAQ along with a special dividend worth 30 trillion won.