Aju Business Daily

SEOUL -- U.S. activist hedge fund Elliott Management seeks more than 670 million US dollars in compensation for losses caused by unlawful government intervention in the 2015 merger of two Samsung units, according to a document released by the justice ministry on Friday.

The ministry disclosed Elliott's notice of intent which was sent on April 13, asking for a settlement over damages incurred from its investment in Samsung C&T. The fund cited its loss estimated to be not less than $670 million as well as interest and costs.

The document is supposed to ask whether the Seoul government intends to seek settlement with Elliott before it files a suit at the Washington-based International Centre for Settlement of Investment Disputes.

In 2015, the fund launched a proxy vote war to prevent the merger of Samsung C&T and Cheil Industries, insisting it is aimed at expediting the transfer of group ownership to Samsung Electronics Vice Chairman Jay Y. Lee, the only son of the group's ailing patriarch Lee Kun-hee.

Samsung narrowly won the battle to complete the merger, helped by support from the National Pension Service (NPS) which held an 11.6 percent stake in Samsung C&T and five percent in Cheil Industries. Elliott owned 7.12 percent.

Lee was arrested in February last year for his role in a corruption scandal involving South Korea's ousted ex-president Park Geun-hye. He was released in February this year after an appeals court handed down a suspended jail sentence.

Park and her aides were accused of pressuring the state fund to support Samsung in return for favors. Elliott argued the state fund's action and intervention by the former government unfairly damaged shareholders in breach of a free trade agreement between Seoul and Washington.

In November last year, the Seoul High Court upheld the sentence of two and half years in prison for Moon Hyung-pyo, a former health and welfare minister, for pressuring the state fund to approve the merger.