“The National Pension Service (NPS) casting a yes vote on the merger between Samsung C&T and Cheil Industries resulted in not only reinforcing the Lee family’s control over Samsung Group but also offering them a financial benefit of 790 billion won (based on closing stock prices on October 1),” Rep. Ahn Cheol-soo of the main opposition New Politics Alliance for Democracy (NPAD) argued at an annual parliamentary audit of the NPS, held on October 5.
“The NPS voted in favor of the Cheil-Samsung C&T merger at the Samsung C&T shareholder's meeting, held on July 17, consequently inflicting damage on minority shareholders of Samsung C&T. On the other hand, the Lee family, including Samsung Electronics Vice Chairman Lee Jae-Yong, tightened their grip on Samsung Group, including Samsung Electronics,” Ahn explained.
“The underlying purpose of the Cheil-Samsung C&T merger was a smooth transfer of managerial rights for the nation’s largest conglomerate. In the process, the NPS which takes care of 20 million people’s retirement savings fully cooperated with the Lee family in carrying out its succession plan without carefully reviewing pension funds’ profitability,” Ahn stressed.
According to Ahn, the NPS continued to sell its Samsung C&T shares in the month prior to the signing of a merger contract on May 26, 2015, thereby playing a role in lowering Samsung C&T share prices. As a result, a swap ratio of 0.35 Cheil share for each C&T share was set in favor of the Lee family and the Lee family enjoyed an asset growth of 790 billion won.
On top of that, the NPS had an inappropriate meeting with Lee Jae-yong and officials from Samsung Future Strategy Office (FSO) on July 7, three days before the NPS’s investment committee convened on July 10 to decide the NPS’s position on the merger deal.
“Samsung Future Strategy Office is Samsung Group’s control tower that supervises the transfer of managerial rights. Thus, the NPS’s meeting with Lee Jae-yong and officials from the FSO can be viewed as the NPS’s recognition of the merger deal as a means of expediting managerial succession to Lee Kun-hee's children,” Ahn argued.
Four days after the NPS met with Lee Jae-yong and official from the FSO, the NPS’s investment committee hurriedly held a meeting on July 10 and decided to vote in favor of on the merger deal.
“Watching the Cheil-Samsung C&T merger deal unfold on the back of the NPS’s yes vote, the public felt a sense of relative deprivation. It is lamentable that the whole nation is caught in the net of Samsung,” Ahn mentioned.
