Financial authorities are stepping up pressure on Samsung Life to sell off its stake in Samsung Electronics.
Choi Jong-koo, head of the Financial Services Commission (FSC) emphasized in a luncheon meeting with reporters in Seoul on May 9 that Samsung Life Insurance does not have a deadline to submit a plan to sell off its stakes in Samsung Electronics, adding, however, that the FSC cannot keep waiting endlessly .
"Samsung Life’s stake in Samsung Electronics has no problem now in terms of its value, but nobody knows when there will be an impact on the value of the stake," Choi said "The core of the issue is that Samsung Life's stake in Samsung Electronics poses a lopsided asset risk to the life insurer."
"Shares account for 14% of Samsung Life’s total assets but this ratio is a meree 0.7% for other life insurers,” chairman Choi said. “This means that Samsung Life will receive a shock from a change in stock prices which is 20 times stronger than the one for other life insurers.”
Samsung Life holds an 8.27% stake in Samsung Electronics at the moment. The stake is worth around 27 trillion won.
"What we are paying attention to is whether or not Samsung Life Insurance will secure financial stability," chairman Choi said. "As there is concern over the management right to the company, it is right for Samsung Life that knows current situations best to find a way on its own."