[Alpha Biz= Paul Lee] A damages lawsuit filed by South Korea’s National Pension Service (NPS) against Samsung C&T and Samsung Electronics Chairman Lee Jae-yong over alleged losses stemming from the 2015 merger between Samsung C&T and Cheil Industries will begin trial proceedings on March 19.

According to legal sources, the Seoul Central District Court’s Civil Agreement Division 21 will hold the first hearing later in the day, approximately 18 months after the case was filed in September 2024.

Defendants in the case include Samsung C&T, Chairman Lee Jae-yong, former Samsung Group Future Strategy Office chief Choi Gee-sung, and former deputy chief Jang Choong-ki. Also named are former Minister of Health and Welfare Moon Hyung-pyo and former head of the NPS Investment Management Division Hong Wan-sun.

The lawsuit seeks damages of KRW 510 million, though the amount could increase depending on expert assessments of losses during the litigation process.

Some observers note that the damages amount could be reduced, given that Chairman Lee and other defendants were acquitted in related criminal proceedings.

The lawsuit was filed about 10 months before the expiration of the statute of limitations. Under Korean law, damages claims are subject to a 10-year statute of limitations from the time of the alleged harm, which in this case is tied to the July 2015 shareholder approval of the merger.

On May 26, 2015, Samsung C&T and Cheil Industries agreed to merge at a ratio of 1:0.35, and the deal was approved at an extraordinary shareholders’ meeting in July of the same year.

At the time, the NPS, which held a 11.21% stake in Samsung C&T, voted in favor of the merger, later found to have been influenced by government pressure.

Former Minister Moon and former NPS CIO Hong were each sentenced to two and a half years in prison for pressuring the NPS to support the merger. Chairman Lee was also sentenced to two and a half years for bribery related to the merger and succession planning.

In a separate case, Lee and other executives were indicted in September 2020 on charges including accounting fraud and unfair trading related to the merger. However, the Supreme Court acquitted all defendants in July last year.

 

 

 

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