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US hedge fund demands $770m from S Korea over Samsung merger

AFP  |  Seoul 

A US hedge fund is demanding almost $800 million from at an international tribunal over the controversial merger of two units of the giant conglomerate, officials said today.

The 2015 deal, in which fashion, and Industries took over construction company C&T for $8.0 billion, featured in the sprawling corruption scandal that brought down ousted

The transaction -- which activist fund and other shareholders said wilfully undervalued C&T -- was seen as a key step to ensuring the succession of heir

It went through after the (NPS) -- C&T's biggest shareholder -- approved it.

Prosecutors accused Lee of seeking government backing for the deal, and at trial he was found guilty of bribery and sentenced to five years in prison, although most of his convictions were later overturned on appeal.

Now US-based Elliott, whose whose 7.12 per cent stake in C&T made it the company's second-largest shareholder, has sent a "notice of arbitration" of an investor-state dispute to the South Korean government, the justice ministry said in a statement.

"In the notice, it claims it suffered no less than $770 million damages from the merger between and Industries as a result of the government's 'illegitimate' intervention," the ministry said.

Elliott is seeking a ruling from the (UNCITRAL) and suggested Britain as the venue, it added.

The government -- now led by Park's longstanding opponent Moon Jae-in -- had launched a joint task force to address the issue, it said.

Former was convicted of abuse of power for pressuring the NPS to vote for the merger and was sentenced to 30 months in prison, a ruling upheld by the appeal court.

At his trial, prosecutors argued that Moon had been ordered to support the deal by then-Park, who was subsequently jailed for 24 years for bribery, coercion and abuse of power.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, July 13 2018. 16:25 IST