[Yonhap News Photo]
SEOUL -- U.S. investor Elliott Associates said Wednesday that it is taking legal action against the South Korean government over its alleged unlawful intervention in the merger of two Samsung units in 2015.
Elliott said that it "is seeking to negotiate with the Republic of Korea regarding compensation for Elliott's damages arising from the former administration's unlawful intervention in the merger of Samsung C&T and Cheil Industries."
Elliott reportedly handed in the Notice of Intent to South Korea's justice ministry last month through the investor-state dispute settlement system.
The document is supposed to ask whether the government intends to seek settlement with Elliott before the U.S. fund files a suit at the International Centre for Settlement of Investment Disputes. Elliott will be qualified to sue the South Korean government at the Washington-based organization three months after sending the notice.
"The actions by the former administration and the NPS were in breach of KOR-US FTA and constituted manifestly unfair and inequitable treatment of Elliott," the U.S. fund said, calling for compensations for investors "who are victimized by breaches" of the free trade deal.
In 2015, Samsung C&T Corp. merged with Cheil Industries Inc. with the support of the National Pension Service (NPS). Elliott raised objections to the motion, claiming that the merger ratio of 1:0.35 for Samsung C&T and Cheil Industries was unfair for Samsung C&T shareholders. During the deal, the NPS held a 11.21 percent stake in Samsung C&T, while Elliott accounted for 7.12 percent.
"The facts revealed since the 2015 merger are clear: the web of corruption, reaching from the President herself down to the NPS, unfairly damaged Elliott and other SC&T shareholders," Elliott said.
In November last year, the Seoul High Court upheld the sentence of two and half years in prison for Moon Hyung-pyo, a former health and welfare minister, for pressuring the NPS to approve the merger in connection with a corruption scandal involving ousted President Park Geun-hye.
(Yonhap)