Samsung Shareholders Meeting Overshadowed by Trial

Samsung’s shareholders will be meeting for the first time since the arrest of de facto chief Jay Y. Lee, with questions looming over whether any changes to its corporate structure are in store, according to Bloomberg.

The only votes being held Friday will be on the company’s financial statements and directors’ compensation. The annual meeting, however, will be an opportunity to question Samsung’s board as it reviews whether to separate the electronics conglomerate into a holding company with operational businesses.

Samsung embarked on a review of its structure in November after activist shareholder Paul Elliott Singer pushed for more independent board members, a U.S. listing, special dividends and a split of the company. Since then, Lee has been caught up in a national influence-peddling scandal, standing trial on charges of bribery and embezzlement.

Even amid the turmoil surrounding Samsung, including an embarrassing recall of smartphones last year, the company’s shares are trading near record highs. The stock has climbed more than 25 percent since the company announced the restructuring review in November.

Elliott lost a fight to prevent the 2015 merger of two affiliated units, Cheil and Samsung C&T, which helped to cement Lee’s control over the empire founded by his grandfather. The allegations against Lee include assertions that he won support for the merger from Korea’s National Pension Service in exchange for helping a friend of former President Park Geun-hye.

Still, if Samsung turns into a holding company, Lee would solidify his control over Samsung Electronics without a huge cash outlay, because he can rely on his stake in Samsung C&T, which owns more than 4 percent of the technology division. Elliott, which still retains an undisclosed amount of shares in Samsung, declined to comment.

Last week, Samsung reaffirmed that it was still conducting a “thorough review of the optimal corporate structure, including the possibility of creating a holding company.“ Shares of Samsung affiliates jumped on earlier reports that CFO Lee Sang-hoon said the company is looking at whether to transform itself into a holding company.