By Yoon Ja-young
A local newspaper reported Thursday that Cheong Wa Dae and the former health and welfare minister pressured the National Pension Service (NPS) to support the merger of Samsung C&T and Cheil Industries last year.
The daily Hankyoreh cited a member of the NPS's voting committee, who said that he was pressured by Moon Hyung-pyo, then minister of health and welfare, as well as Cheong Wa Dae to vote for the merger between the two Samsung subsidiaries.
The NPS, which had an 11 percent stake in Samsung C&T, voted for its merger with Cheil Industries even though the terms of the merger were unfavorable to Samsung C&T shareholders while benefiting Cheil Industries shareholders. A Samsung C&T share was exchanged for 0.35 of a share in Cheil Industries. It was regarded as a deal designed in favor of the Samsung Group's owner family, who had 42 percent stake in Cheil Industries. The owner family was in need of merger as it would enable the establishing of a de-facto holding company, which was essential for smooth transfer of managerial control within the family.
The committee member told Hankyoreh that he got a phone call from then Minister Moon who told him to vote for the merger. He also got a separate phone call from someone who told him that the merger was supported by Cheong Wa Dae.
Thanks to the support of the NPS, the merger was approved at the general shareholders' meeting in July last year despite opposition by U.S. activist fund Elliott which was the third largest shareholder with a 7 percent stake. ISS, the world's largest independent proxy advisory firm, also had recommended that it should oppose the merger.
The country's leading NGOs including the People's Solidarity for Participatory Democracy criticized the NPS fund manager, saying that the pension fund sustained a 600 billion won loss by supporting the merger.
Moon, who is currently CEO and chairman of the NPS, however, denied the allegation. In a media release, Moon said he had never pressured the committee member regarding the merger. He acknowledged that he had a phone call with the committee member who was a former colleague, but said that the conversation only included his personal opinion on the matter as an expert.
A local newspaper reported Thursday that Cheong Wa Dae and the former health and welfare minister pressured the National Pension Service (NPS) to support the merger of Samsung C&T and Cheil Industries last year.
The daily Hankyoreh cited a member of the NPS's voting committee, who said that he was pressured by Moon Hyung-pyo, then minister of health and welfare, as well as Cheong Wa Dae to vote for the merger between the two Samsung subsidiaries.
The NPS, which had an 11 percent stake in Samsung C&T, voted for its merger with Cheil Industries even though the terms of the merger were unfavorable to Samsung C&T shareholders while benefiting Cheil Industries shareholders. A Samsung C&T share was exchanged for 0.35 of a share in Cheil Industries. It was regarded as a deal designed in favor of the Samsung Group's owner family, who had 42 percent stake in Cheil Industries. The owner family was in need of merger as it would enable the establishing of a de-facto holding company, which was essential for smooth transfer of managerial control within the family.
The committee member told Hankyoreh that he got a phone call from then Minister Moon who told him to vote for the merger. He also got a separate phone call from someone who told him that the merger was supported by Cheong Wa Dae.
Thanks to the support of the NPS, the merger was approved at the general shareholders' meeting in July last year despite opposition by U.S. activist fund Elliott which was the third largest shareholder with a 7 percent stake. ISS, the world's largest independent proxy advisory firm, also had recommended that it should oppose the merger.
The country's leading NGOs including the People's Solidarity for Participatory Democracy criticized the NPS fund manager, saying that the pension fund sustained a 600 billion won loss by supporting the merger.
Moon, who is currently CEO and chairman of the NPS, however, denied the allegation. In a media release, Moon said he had never pressured the committee member regarding the merger. He acknowledged that he had a phone call with the committee member who was a former colleague, but said that the conversation only included his personal opinion on the matter as an expert.
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