SEOUL, A group of activist funds have called for Samsung CandT Corp., the de facto holding company of South Korea’s Samsung Group, to enhance shareholder value at a general meeting next month, the company said Thursday.

Five activist funds, including City of London Investment Management and Whitebox Advisors LLC, demanded Samsung CandT raise cash dividends and cancel treasury stocks. The company plans to put the requests up for a vote at an annual shareholders meeting on March 15, the company said in a regulatory filing.

The five investors asked the company to buy back 500 billion won (US$375 million) worth of treasury stocks for cancellation and provide 4,500 won and 4,550 won per share, respectively, for common and preferred stocks in dividends.

“Such huge shareholder returns (proposed by the funds) worth more than 1.2 trillion won will make it difficult for the company to carry capital to secure future growth engines and strengthen the competitiveness of its businesses,” the filing said.

The requested
dividends are far higher than the 2,550 won for common stocks and 2,600 won for preferred stocks offered by the company.

But their proposals are not expected to be approved in the annual meeting as their combined stake in Samsung CandT stands at a mere 1.46 percent.

At a board meeting on Wednesday, Samsung CandT said it will cancel its 7.81 million common stocks, or a 4.2 percent stake in the builder, as well as its entire 160,000 preferred stocks, or a 9.8 percent stake.

The value of the stocks set to be cancelled exceeds 1 trillion won, accounting for one third of Samsung CandT’s treasury shares.

The company plans to cancel all of the remaining treasury stocks by 2026 to boost its shareholder value.

On Feb. 5, the Seoul Central District Court acquitted Samsung Electronics Co. Executive Chairman Lee Jae-yong of stock manipulation and accounting fraud charges connected to the controversial 2015 merger of two Samsung affiliates — Samsung CandT and fashion company Cheil Industries Inc.

The Lee family and
related entities controlled Cheil before the merger but not Samsung CandT which was a major shareholder in Samsung Electronics Co., the crown jewel of the country’s biggest conglomerate.

Prosecutors viewed the merger as being designed to cement Lee’s control of Samsung Electronics, the world’s largest maker of memory chips and displays.

Source: Yonhap News Agency