Foreign investors have continued to dump shares of Samsung C&T Corp., the fashion and trading arm of South Korea's top conglomerate, since its merger last year, dragging down its share prices, the bourse operator said Wednesday.

The foreign ownership at Samsung C&T stood at 7.62 percent as of Tuesday, the lowest level since Sept. 15, when its shares resumed trading on the Seoul bourse, following the merger with then-Cheil Industries to become the group's de facto holding firm, the Korea Exchange said. 


The ratio reached nearly 11 percent in the initial trading, but it has kept sliding as offshore investors remain skeptical over the synergy effect from the merger and downbeat earnings.

Its shares have sank 26 percent since Sept. 15, closing at 120,000 won ($100.82) on Tuesday, led by foreign and institutional selling over the past months.

"The premium related to the merger issue and disappointment in the process of the merger seem to have fueled the selling by foreign investors," said Lee Jong-woo, a researcher at IBK Investment & Securities.

Samsung C&T said the merger was to create synergy, but opponents argued the move was aimed at solidifying the owner family's control of Samsung Group at the expense of minority shareholders.

Samsung C&T is currently preparing to appeal a court ruling ordering it to pay five shareholders more for a buyback offered during the merger.

Samsung C&T proposed to its shareholders who were against the merger that it would buy back their holdings at a set value of 57,234 won per share based on the then stock price.

Minority shareholders and Ilsung Pharmaceuticals Co., a local drugmaker that held a 2.11 percent stake in then-Samsung C&T, filed a suit, seeking adjustment of the purchase price, which they said was too low.

Overturning a lower court's decision, the Seoul High Court ordered Samsung C&T to increase the stock purchase price proposed to minority shareholders to 66,602 won, which was the market price before speculation on the merger started to loom in the industry.

The appeals court said there are considerable reasons to believe that the low stock price was intended to benefit the Samsung Group.

U.S. hedge fund Elliot Associates had also filed a similar suit but dropped the case in March after reaching an agreement with Samsung C&T. (Yonhap)