Samsung C&T Shareholders Lose State Lawsuit Over Jeilmojik Unfair Merger

[Asia Economy Reporter Kim Daehyun] Shareholders of Samsung C&T filed a state compensation lawsuit claiming losses from the 2015 merger between Samsung C&T and Cheil Industries, but lost in the first trial.

According to the legal community on the 18th, the Civil Division 22 of the Seoul Central District Court (Presiding Judge Jeong Jaehee) recently ruled against the plaintiffs in the first trial of the damages claim lawsuit filed by 72 Samsung C&T shareholders, including Mr. A, against the state.

Seoul Central District Court, Seocho-dong, Seoul. Photo by Mun Ho-nam munonam@

Earlier, Mr. A and others claimed damages from the Samsung C&T merger and demanded about 900 million KRW in November 2020. At the time of the merger, Samsung C&T common stock was priced at 55,767 KRW per share, but they argued that the appropriate stock price was 66,602 KRW per share according to a court ruling, resulting in a loss of 10,835 KRW per share. They also emphasized the state's responsibility, claiming that the merger was finalized due to illegal acts by Moon Hyung-pyo, then Minister of Health and Welfare.

However, the first trial court dismissed the claim, stating, "It cannot be definitively concluded that there is a significant causal relationship between former Minister Moon's abuse of authority and the damages suffered by the shareholders." The court pointed out, "It is acknowledged that former Minister Moon and others exerted some influence over the decision-making process of the National Pension Service, but it is difficult to see that they controlled the Service's decisions through deception or coercion."

Furthermore, the court added, "The National Pension Service Investment Committee independently exercised its voting rights after comprehensively considering the stock market impact, economic impact, and the effect on fund management if the merger failed."

Meanwhile, former Minister Moon and Hong Wan-seon, then head of fund management at the National Pension Service, were each sentenced to 2 years and 6 months in prison last year for pressuring the National Pension Service to support the merger between Samsung C&T and Cheil Industries.