Seoul, Nov 29 (IANS) Samsung Electronics Co. on Tuesday confirmed that it was reviewing the “possibility” of creating a holding company structure to improve the company’s corporate structure and enhance its transparency.
“Samsung Electronics has taken steps to simplify its business to concentrate on core capabilities in the past several years and the company continues to review opportunities to optimise long-term value,” Samsung said in a statement.
“This includes the possibility of creating a holding company structure and the potential benefits and feasibility of listing the company’s shares on additional international exchanges,” the statement added.
The South Korean giant said it would take about six months for the review to be completed.
“The review does not indicate the management or the board’s intention one way or another. The process is expected to require at least six months and Samsung Electronics will make a decision only after the review is complete,” it said.
Samsung also said it would increase total dividends in 2016 by 30 per cent year on year, bringing the annual dividend amount to four trillion won ($3.4 billion).
The announcement came shortly after Samsung’s board of directors held a meeting earlier in the day, amid growing calls to improve shareholder value.
A report on Monday hinted that after being hit by Galaxy Note 7 fiasco and a massive corruption scandal, south Korean tech giant Samsung Electronics was heading for a split as part of a restructuring plan.
According to Seoul Economic Daily and reported by technology website TechCrunch, “Samsung is considering splitting itself into two as per the recommendation by US-based hedge fund Elliott Management and the plan ‘involves splitting Samsung into an operating company, along with a holding company tasked with ownership’.”
Elliott Management, which owns a 0.6 per cent stake in the South Korean tech giant, had reportedly suggested that the company should consider paying a $27 billion dividend from its reserves.
Earlier this month, representatives of the South Korean prosecutor’s office raided Samsung offices in Seoul on suspicion that the tech giant might be involved in a corruption scandal involving President Park Geun-hye and her long-time close friend.
A Samsung spokesperson told Efe news that prosecutors raided the offices dealing with the company’s external affairs as it was believed to be involved in influence peddling by providing illicit favours to President’s Park confidant and close friend Choi Soon-sil’s daughter, dressage rider Chung Yoo-ra.
The prosecutors are investigating allegations that Samsung sent $3.1 million to a company owned by Choi in Germany to fund the equestrian training of her 20-year-old daughter.
Hit by the Galaxy Note 7 debacle where several complaints of battery explosion were reported worldwide, forcing Samsung to recall 2.5 million devices and finally shut down its production.