Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.


Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence


Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
News18 » Tech
2-min read

Samsung Electronics Rejects Calls For Holding Company Structure at Present

Investors had expected the global leader in smartphones and memory chips to adopt a holding company structure, as the founding Lee family tries to solidify its control of the Samsung Group flagship.


Updated:March 24, 2017, 12:59 PM IST
Samsung Electronics Co Ltd, U.S. activist hedge fund, Elliott Management
Jay Y Lee - Vice Chairman - Samsung Electronics. Representative Image. (Image: Reuters)

Samsung Electronics Co Ltd on Friday said it will not adopt a holding company structure for now rejecting demands from U.S. activist hedge fund Elliott Management and putting off a long-anticipated restructuring.

Investors had expected the global leader in smartphones and memory chips to adopt a holding company structure, as the founding Lee family tries to solidify its control of the Samsung Group flagship.

But Chief Executive Kwon Oh-hyun told the annual shareholder meeting this was unlikely at present, deflating some investors' hopes that an ongoing review of the company's organisation will lead to Samsung setting up a holding company.

"Samsung had been saying the review would proceed without issues, so the market had accepted that, but now they are saying the transition will be difficult," said CJ Heo, a fund manager at Alpha Asset Management.

"This will hurt investor sentiment for a while.”

Also read: SoundCloud Raises $70 Million in Debt

The South Korean tech giant used the general meeting to give investors a sense of how it is approaching the mooted restructuring, which has been thrown into doubt by a political scandal that has embroiled Samsung Group leader Jay Y. Lee.

"There are negative effects that would arise from transitioning to a holding company so it does not appear it will be easy to do so at present," Kwon said, without elaborating what those negatives were.

The company is continuing its review and will report the results to shareholders when it is completed, he said.

The comments sent shares of Samsung C&T Corp down more than 7 percent in afternoon trade. Some analysts believed the Lee family would seek to merge C&T, Samsung Group's de facto holding company that Lee heirs control, with the Samsung Electronics holding company.

Elliott in October called for Samsung Electronics to adopt a holding company structure by splitting itself in two and pay out a 30 trillion won ($26.75 billion) special dividend.

Samsung announced the review in November but until now has stayed neutral on the holding structure issue.

An Elliott spokesman declined to comment.

Also read Google India & Ministry of IT Launch Initiatives For PM Modi’s 'New India'


Some investors said any restructuring appeared to have been delayed with Lee's arrest on charges of bribery, embezzlement and other offences in a corruption scandal that led to the removal of President Park Geun-hye from office.

The 48-year-old leader of Samsung Group and Samsung Electronics' vice chairman could face more than 20 years in prison. He denies the allegations.

The political turmoil has come at a sensitive time for the Lee family, with Samsung Group patriarch Lee Kun-hee, 75, in hospital since a May 2014 heart attack and his children facing a multi-billion dollar inheritance tax when he dies.

Lee Kun-hee's frail health appears to have hastened his heirs' efforts to restructure the group and tighten their grip on key affiliates such as Samsung Electronics.

Many Samsung Electronics investors hope a restructuring will streamline the company, improve its governance and boost its value.

Also read: Digitalisation of Indian Armed Forces is Top Priority: Subhash Bhamre

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

| Edited by: Sarthak Dogra
Read full article
Next Story
Next Story

Also Watch


Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results