Prosecution Digs into Process of CB Forfeit by Samsung Affiliates

Prosecution Digs into Process of CB Forfeit by Samsung Affiliates. October. 06, 2005 07:16. woogija@donga.com wiseweb@donga.com.

The financial inspection department at the Seoul Central District Prosecutors’ Office has started a reinvestigation into the illegal transactions of Samsung Everland convertible bonds (CB). It announced that it has confirmed the details of how the eight shareholders, all affiliates to Samsung, forfeited the acquisition of CBs.

Prudent Inspection -

The prosecution is investigating whether there was a group conspiracy in the process of forfeiting the acquisition of CBs when Samsung Everland issued the CBs in December 1996.

After analyzing the court rulings and investigation records, the prosecution will start investigating the defendants including the heads of the Samsung affiliates during the middle of this month at the earliest. Step-by-step measures will be taken to prevent the defendants from leaving the country.

A prosecution official said, “We need time, and we plan to make a thorough and prudent investigation.”

The prosecution also showed a cautious response to the search and seizure of Samsung affiliates and Samsung Everland.

Civic Group Movements -

The People’s Solidarity for Participatory Democracy (PSPD) said that it will file against the Samsung affiliates who exited the CB acquisition on October 5.

Kim Sang-jo, head of the economy committee at PSPD, said, “Everland is an unlisted company, and since the shareholders are officials of Samsung, there are no minority shareholders to demand compensation. Instead, shareholders are planning to file a compensation claim for damage to the heads of Samsung Corporation and Cheil Industries, who forfeited the acquisition of CBs, which could have brought a large profit.”

This filing made by shareholders is a system which enables shareholders to file against corporate leaders who have caused damages to the company, when the company itself does not request a compensation for damage.