Samsung headquarters located at Seocho district, Seoul [Photo by Namkung Jin-woong timeid@ajunews.com]
South Korea’s Samsung Group said it will take actions to comply with the order by the country’s anti-trust regulator that the conglomerate rationalize its governance structure by cutting cross holdings strengthened by a merger between two key affiliates.
The group’s battery-making arm Samsung SDI must sell $622 million worth of shares representing a 2.6 per cent stake in sister-firm Samsung C&T Corp, the group’s de-facto holding company created by the merger in September, by March 1 next year or face penalties.
The ruling by the Fair Trade Commission (FTC) sent shares of Samsung C&T Corp falling sharply on Monday. But it will not endanger the founder Lee family's hold over the firm or the larger electronics-to-fashion conglomerate. De facto leader Jay Y. Lee and his siblings control nearly 40 percent of the firm.
South Korean government has been trying to address a complex web of cross-shareholdings, a common practice among major conglomerates including Hyundai Motor Group and Lotte Group.
South Korea bans the creation or reinforcement of circular shareholdings under the 2014 Fair Trade Law.
By Alex Lee
reporter
Park Sae-jin
swatchsjp@ajunews.com
