Relieved from Suspicion of Violating Disclosure Rule
The Seoul Southern District Prosecutor’s Office announced on June 29 that it decided on May 25 not to indict Elliott Management.
According to the Financial Investment Services and Capital Markets Act, a shareholder with a shareholding of 5 percent or more must publicly disclose the shareholding status within five days. Earlier, on June 2, 2016, Elliott Management disclosed that it owned 4.95 percent of Samsung C&T shares. The disclosed ratio was changed to 7.12 percent two days later and then Elliott Management objected to the Samsung C&T-Cheil Industries merger.
The Securities & Futures Commission under the Financial Services Commission determined from the sizeable increase in shareholding in just two days that Elliott Management violated the duty of disclosure with shares already owned. At that time, many in the industry also said that Elliott Management collected shares without disclosure via total return swap trading and made the announcement all of a sudden.
The commission requested an investigation and the prosecutor’s office investigated the U.S. hedge fund for about four years, which ended with acquittal. “The non-indictment decision means that listed companies where governance restructuring is necessary now face more threats from foreign hedge funds,” said a local listed company.