Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Will Samsung shoulder gov't payment of $108.5 million to Elliott?
Samsung Electronics Executive Chairman Lee Jae-yong enters the Seoul Central District Court to attend a hearing for conspiracy allegations in an illegal merger and accounting fraud in this October 2022 file photo. Yonhap
By Park Jae-hyuk
By Park Jae-hyuk
Debate is heating up on whether the government should ask Samsung to compensate $108.5 million worth of taxpayers' money that is to be paid to Elliott Management, or whether the country should lodge an appeal against the international tribunal's latest ruling in favor of the U.S. private equity firm, according to industry officials, Wednesday.
The controversy was sparked when the Permanent Court of Arbitration in the Netherlands delivered a verdict on Tuesday, ordering the Korean government to pay Elliott $53.59 million ― around 7 percent of the amount the U.S. firm had claimed ― in addition to interest in arrears and legal fees.
The court saw that the Korean government is responsible for the losses of Samsung C&T shareholders, as the National Pension Service approved in 2015 the company's controversial merger with Cheil Industries, which was apparently intended for Samsung Electronics Executive Chairman Lee Jae-yong to inherit the group's control from his father.
Progressive civic groups and the opposition bloc urged the government to ask Lee's family and former government officials under the Park Geun-hye administration to make up for the loss.
“For the sake of the Samsung owner's family and Lee's illegal managerial succession, Korea is on the verge of paying around 130 billion won worth of taxpayers' money,” the Citizens' Coalition for Economic Justice said in a statement, Wednesday. “It is reasonable for Lee's family and those responsible for the case to make full compensation.”
Lawyer Song Ki-ho of the law firm Suryun Asia, which specializes in international trade laws, also said the government should consider asking Lee and Park to indemnify the country's loss.
“If the government continues to lodge an appeal against the international tribunal's ruling, it will not be able to exercise its right to ask offenders to make compensation,” he said.
When the government lost in the previous international litigations filed by Iran's Dayyani and U.S. Lone Star Funds, it did not attempt to get compensation from those who were responsible for the legal battles, according to the lawyer.
Samsung C&T's flag waves in front of the company's office building in Seoul in this file photo. Newsis
Seung Jae-hyun, a researcher at the state-run Korean Institute of Criminology and Justice, however, emphasized that the government must lodge an appeal if it is unsatisfied with the countermeasures taken mostly under the previous Moon Jae-in administration.
“Because Korea is still in dispute with U.S. Mason Capital for the same issue, the justice ministry's response to the latest ruling is important,” he said.
Amid the controversy, Samsung said Wednesday that it has nothing to say about this matter, as the government has demanded nothing so far.
The justice ministry plans to unveil its analysis of the latest verdict and its follow-up measures in the near future. However, the ministry's spokesman refused to disclose when it will make the announcement.
After the international tribunal notified the ruling on Tuesday evening, the justice ministry made optimistic remarks, saying that the government clinched a “93 percent victory.”