Weighing further upon the group is the recent appointment of a former civic group activist and progressive lawmaker who is known for reformist conglomerate policies as the head of the nation’s financial market watchdog.
Samsung Life Insurance and Samsung Fire & Marine Insurance may have to sell off affiliate stocks worth as much as 21 trillion won ($20 billion), if the Financial Supervisory Service revises the Insurance Business Act under the lead of Gov. Kim Ki-sik, according to industry observers Wednesday.
|FSS Gov. Kim Ki-sik. (Yonhap)|
Separately from the latest regulations, Samsung Life Insurance has been grappling over its share of the group’s core affiliate Samsung Electronics, as the latter is slated to shed some 9.4 million units or 7.29 percent of its current stocks. In that case, the aggregated share held by two insurer units will exceed the 10 percent cap as prescribed by the Act on the Structural Improvement of the Financial Industry.
In order to comply with the cross-shareholding restriction, the two companies will have to sell off 0.43 percent of their Samsung Electronics stocks, which totals 1.3 trillion won at the current market price.
Another possible challenge for the conglomerate’s insurers is the revision of the insurance law, which the new FSS chief has been advocating since his years in the parliament.
The current insurance act limits an insurer’s ownership of affiliate stocks to 3 percent of its own total assets -- an amount based on the acquisition cost. Gov. Kim earlier said that the rules must be revised so as to apply the current market price, as is the case in most other financial restrictions.
“(The acquisition cost rule) is an exception that exists only for the sake of Samsung Group‘s corporate governance,” Kim had said, calling for the revision.
|(Samsung Life Insurance)|
The disposal would also affect Samsung Electronics Vice Chairman Lee Jae-yong, who exerts leverage on the group as its de facto owner through a series of cross-shareholding.
However, speculations remain that the reformist FSS chief may refrain from immediate action, considering the power balance with the FSC and his recent low-key gestures.
By Bae Hyun-jung