Seoul: Hit by Galaxy Note 7 fiasco and a massive corruption scandal, South Korean tech giant Samsung Electronics may be heading for a split as part of a restructuring plan during a shareholders’ conference call on Tuesday.
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 percent stake in the South Korean tech giant, had reportedly suggested that the company should consider paying a $27 billion dividend from its reserves.
Later, Samsung US responded to TechCrunch, saying “Samsung doesn’t comment on rumours or speculation”.
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.
A Samsung spokesperson told Efe news that prosecutors raided the offices in charge of 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.
It was the first time in eight years that the prosecutors have raided the headquarters of the country’s largest conglomerate.
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, the company also recalled about 2.8 million top-loading washing machines due to risk of impact injuries.