South Korea ordered to pay $32 million in lawsuit regarding merger of 2 Samsung affiliates

An international tribunal ordered South Korea to pay 43.8 billion won ($32 million) in compensation to US-based hedge fund Mason Capital over a 2015 Samsung affiliates merger. The Permanent Court of Arbitration in the Netherlands issued the decision nearly six years after the dispute settlement process began.

The case dates back to the controversial 2015 merger of Samsung C&T and Cheil Industries, with Mason Capital objecting to the undervaluation of Samsung C&T shares. The fund, holding a 2.18 percent share in Samsung C&T at the time, filed the lawsuit in 2018, alleging unfair government intervention in favor of the merger.

The merger, aimed at strengthening Samsung heir Lee Jae-yong’s control over the group, was at the center of a corruption scandal leading to the conviction of former President Park Geun-hye and the imprisonment of Lee. Mason accused the Park administration of exerting influence in the National Pension Service, a key shareholder in Samsung C&T.

The ordered compensation amount, approximately 16 percent of Mason’s demand, includes interest on delayed payments. The investor-state dispute settlement process concluded with the tribunal’s decision, providing a resolution to the long-standing legal battle between the US hedge fund and the South Korean government.