In a lawsuit filed by minority shareholders claiming damages from the merger of Samsung C&T and Cheil Industries, the court did not recognize the liability of Samsung C&T or Lee Jae-yong, chairman of Samsung Electronics. The court determined that the merger had a legitimate business purpose and found it difficult to acknowledge any illegality in the merger ratio or approval process.
The Seoul Central District Court's Civil Division 30, led by Judge Kim Seok-beom, dismissed the approximately 200 million won damage claim from 26 plaintiffs, including Shim Mo, on October 29. This ruling comes nearly six years and eight months after the lawsuit was filed in February 2020.
The court concluded that Samsung C&T pursued the merger with considerations for stabilizing management, enhancing asset value, and improving financial structure. It stated, "It cannot be said that the sole purpose of the merger was to strengthen Chairman Lee's control over the Samsung Group."
The court also determined that the merger ratio was calculated based on stock value, following evaluations by external professional institutions in accordance with the Capital Markets Act. It found no evidence of intentional manipulation of market prices or any illegal activities that would indicate the merger ratio was significantly unfair simply because it did not align with asset size or value.
Claims that former Samsung C&T directors violated their duty of care and loyalty were also rejected. The court noted that the directors had adequately reviewed the company's financial situation, the timing and ratio of the merger, and expected benefits before approving the merger, making it difficult to recognize any conflict of interest or breach of duty. As the directors' illegal actions were not acknowledged, the court also denied shared liability for Samsung C&T and Chairman Lee.
The merger, completed in September 2015, involved Cheil Industries absorbing the former Samsung C&T and changing its name to Samsung C&T. Shareholders had argued that the merger was conducted at an unfavorable ratio for the former Samsung C&T, with 0.3500885 shares of Cheil Industries allocated for each share of the former Samsung C&T, which they claimed harmed their interests in favor of Chairman Lee's management succession.
Chairman Lee was indicted on charges of involvement in unfair trading and market manipulation during the merger process but was acquitted by the Supreme Court in July of last year. Separately, a damage claim lawsuit filed by the National Pension Service against Chairman Lee and Samsung C&T is ongoing, with proceedings expected to continue into September 2024.
* This article has been translated by AI.
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