Samsung C&T Shareholders Claiming Losses from "Unfair Merger" Lose First Trial
Court: "Chairman Lee Jae-yong and executives not liable for damages"
Individual shareholders who sued over losses they said they suffered from the unfair merger between Samsung C&T and Cheil Industries lost their case in the first trial.
The 30th Civil Division of the Seoul Central District Court, presided over by Judge Kim Seok-beom, ruled on October 29 against 26 plaintiffs, including a shareholder surnamed Shim, in their damages suit against Samsung C&T and others. The court dismissed all the plaintiffs' claims, saying it could not find Samsung C&T, its executives or Samsung Electronics Chairman Lee Jae-yong liable for damages.
The plaintiffs filed the suit in 2020, alleging that they suffered losses because the merger was unfairly carried out to facilitate Lee's succession to control of the company. Samsung C&T and Cheil Industries had resolved in May 2015 to merge, exchanging approximately three Samsung C&T shares for one Cheil Industries share. The merger plan was approved at an extraordinary shareholders' meeting in July that year, and the merger took effect on September 1.
The court ruled that it was difficult to conclude that the merger between Samsung C&T and Cheil Industries had been carried out solely to strengthen Lee's control over Samsung Group.
It added, "The merger ratio in this case was calculated after valuing the shares in accordance with the Capital Markets Act," and "no special circumstances were found to indicate that stock prices had been deliberately manipulated or that conduct prohibited by law had been involved."
The court also said the merger could not be deemed unfair solely because Samsung C&T and Cheil Industries differed in the scale and value of their assets.
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Meanwhile, Lee was indicted on criminal charges of misconduct in the process of pursuing the merger, but the Supreme Court finalized his acquittal in July last year.
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