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South Korea was ordered to pay damages of 53.6 million dollars (which become more than 100, including interest and legal costs) to the US activist fund Elliott Investment Management, due to the intervention of the previous administration in the 2015 merger of two affiliates of Samsung. The news comes from the Ministry of Justice of South Korea which announced the ruling of the Permanent Court of Arbitration in The Hague. The judges accepted about 7% of Elliott’s claims, amounting to $770 million.
The ruling will cost the country a total of 130 billion won ($102 million) in damages, interest and legal costs. Elliott is examining the ruling “carefully,” according to a statement. “The decision demonstrates the harm done to investors, both foreign and Korean domestic pensioners, by the corrupt relationships between government officials and the chaebol,” Elliott said. ultimate reward rather than pursuing unfounded legal proceedings to challenge the Tribunal’s decision,” the statement reads.
Litigation between Elliott and South Korea dates back to 2015, when the activist investor lost a proxy battle over the merger between Samsung C&T Corp. and Cheil Industries Inc. The tie-up was seen as a plan to increase the heir’s stake of Samsung Jay Y. Lee into a de facto holding company of the conglomerate. Samsung narrowly avoided defeat after getting a critical vote from the National Pension Service, the national pension service run by the South Korean government. It later emerged that the NPS had sided with Samsung after pressure from the presidential office led by then-President Park Geun-hye.
Both Lee and Park were convicted of bribery but were granted special pardons. Elliott referred the dispute to arbitration in 2018 and asked the South Korean government to pay her at least $770 million. The activist, who held about a 7% stake in C&T in 2015, claimed he would have reaped more returns from his investment without South Korea’s intervention. South Korea denied the claim, saying Elliott could profit from his position through cover operations.