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Samsung gets raided again over controversial merger deal

Business
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Last updated: November 23rd, 2016 at 06:37 UTC+01:00

Samsung finds itself ensnared in a corruption scandal that threatens to bring down South Korea’s President Park Geun-hye. The Supreme Prosecutors’ Office of South Korea has previously raided Samsung Electronics HQ in Seoul after allegations of bribes being paid to the president’s close personal friend Choi Soon-sil in order to gain influence. Some of Samsung’s top executives, even the heir apparent, have been questioned by the prosecutors.

The offices of Samsung Group were raided earlier today as part of the probe into the corruption scandal, some reports suggest that Choi Soon-sil used her influence to pressure South Korea’s National Pension Service to vote in favor of the controversial merger of Samsung C&T and Cheil Industries last year. The offices of NPS have been raided today as well.

South Korea’s National Pensive Service was the largest shareholder of Samsung C&T as it held around 10 percent of the company. The merger between Samsung C&T and Cheil Industries was strongly opposed by many minority shareholders and global equity funds who believed that it would only increase the founding Lee family’s hold over the conglomerate and provide little or no value to minority shareholders. We’ve already explained in another post how this controversial merger was passed.

The National Pension Service’s vote was crucial in pushing this merger through. Following the corruption probe there have been allegations that Samsung backed Choi’s sham foundations in return for influence. It’s alleged that Choi used her close position with the president to put pressure on the NPS to vote in favor of the merger. The prosecutors will now investigate whether the NPS only supported the merger due to the pressure that Samsung was effectively able to buy.

Samsung has previously said that it will cooperate with the authorities every step of the way. None of the allegations against the company have actually been proved right now.

Via Business Samsung Group
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