With its jailed de facto leader on trial, Samsung Securities, a key financial arm of South Korea's largest conglomerate, was forced to put off its bid for a top-tier investment banking club being fostered by South Korean financial regulators.
Samsung and four other leading securities firms have applied for approval from the Financial Services Commission, a powerful state financial watchdog, to join the ranks of large-sized investment banks.
At the commission's initiative to nurture big investment banks capable of competing with global players, domestic securities firms with more than four trillion won (3.5 billion US dollars) in their capital will be allowed to issue one-year promissory notes and provide wider corporate financing services.
The commission, however, has decided to put off the screening of Samsung Securities, the company said in a regulatory filing Thursday, due to a court battle involving its major shareholder.
Prosecutors demanded 12 years in prison for Samsung Electronics vice chairman Jay Y. Lee on charges of providing bribes in an attempt to facilitate the succession of group leadership from his bedridden father. He also faces other charges in a corruption scandal involving ousted former president Park Geun-hye. The verdict will come on August 25.
Samsung Life Insurance controlled by the ruling Lee family is the largest shareholder of Samsung Securities with a 29.4 percent stake. Originally, the group had tried to streamline its bloated structure into two major sections with Samsung Life controlling financial units and Samsung Electronics spearheading nonfinancial affiliates.
The commission will go ahead with the screening of four other securities firms including NH Investment & Securities. Mirae Asset, a leading asset manager, created South Korea's largest securities firm with its equity capital standing at 6.7 trillion won through a merger of Mirae Asset Daewoo and Mirae Asset Securities.
KB Financial, the country's biggest financial group by market capitalization, has absorbed Hyundai Securities. It aims to transform itself into a universal bank that provides investment banking and other services.
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