Samsung Group Fights to Defend its Control

Samsung Group is making all-out efforts to defend its management right by expanding its control of Samsung Corp., the effective holding company of the conglomerate.

Samsung Corp. is the virtual holding company of Samsung Group, holding 3.48 percent stake in Samsung Electronics, 1.48 percent in Samsung Everland, 5.59 percent in Samsung Fine Chemicals, 3.12 percent in Samsung Card, 12.64 percent in Cheil Communications, and 4.28 percent in Samsung Techwin.

Samsung Corp. has emerged as an object of potential hostile merger and acquisition moves since the latter half of last year when UK-based Baillie Gifford Fund purchased 4.85 percent of its stake, Hermes Fund 5 percent and Australia-based Platinum Fund 5.8 percent. Foreigners' equity share of Samsung Corp. soared more than double to 45.04 percent from 21.88 percent early last year.

Separate from Samsung Corp., Samsung Electronics has been purchasing its own shares since August. Korea Stock Exchange officials interpret the move as part of defending the firms' right of management. By possessing purchased shares instead of burning them, the stake of Samsung Electronics' largest shareholder and people in special relationships will rise to 23.2 percent from 20.83 percent. Shares of one's own company, devoid of voting rights as they are, could be used for defending a right of management indirectly as stakes can be transferred to friendly forces later.