[THE INVESTOR] One of Korea’s largest civic groups will be lodging a complaint against the top management of construction and trading firm Samsung C&T, Samsung Electronics vice chairman Lee Jae-yong and the state pension fund, the National Pension Service, for malpractice and stock price manipulation in the merger of Cheil Industries and Samsung C&T in 2015.

The People’s Solidarity for Participatory Democracy claimed Wednesday that the merger between Cheil Industries and Samsung C&T was made to benefit the Samsung Group heir apparent and strengthen his grip on Samsung Electronics, the crown jewel of the conglomerate. 


It argued that the stock price of Samsung C&T, at 57,234 won ($48), was set lower than the stock’s actual value when the two companies were merged.

An appeals court on May 31 ruled in favor of minority shareholders who had sued Samsung C&T for stock price manipulation, overturning the decision of a lower court.

The higher court ordered the firm to increase the stock purchase price proposed to shareholders who were opposed to the firm’s merger to 66,602 won, the market price before rumors of the merger spread through the market.

Vice chairman Lee is the largest shareholder of Samsung C&T with a 17.2 percent stake.

The construction and fashion arm under the conglomerate, which owns 4.1 percent of Samsung Electronics, holds 19.3 percent of Samsung Life Insurance. The insurance business unit owns 7.6 percent of the tech firm.

The group also accused the NPS of supporting the merger by violating a rule that requires an advisory board to be formed before making an important decision.

By Kim Young-won (wone0102@heraldcorp.com)