The Fair Trade Commission says that cross-shareholding inside Samsung Group has strengthened following the recent merger of Samsung C&T and Cheil Industries.
 
Therefore, Samsung will have to sell five million shares in Samsung C&T, which are owned by Samsung SDI and worth 727-point-five billion won, by March 1 next year.
 
The trade watchdog said that the number of cross-shareholding links at Samsung Group has decreased from ten to seven since the merger, but that three of the remaining links have grown stronger.
 
Cross-shareholding refers to a corporate governance structure in which a business group owns shares in its affiliates, allowing its owner to take control over the entire group with a small amount of shares.
 
The fair trade law bans corporate groups with asset values of five trillion won or above from creating new cross-shareholding links or strengthening existing ones. The law also requires them to dissolve new cross-shareholding links within six months if they were created through a merger.
 
Samsung says that it will accept the commission’s decision with plans to request an extension to the two-month grace period.
 
The watchdog’s decision regarding Samsung Group is the first application of the revised fair trade law banning any new cross-shareholding investments, which went into effect in July last year.
 
The Fair Trade Commission says that it will review the delaying the deadline if Samsung Group officially requests.