Spat Between Samsung and NYC Hedge Fund Takes Nasty Detour Into Jew-Baiting
Paul Singer attacked with shocking illustrations because ‘Jewish money has long been known to be ruthless and merciless’
This screencap of Samsung C&T’s official website shows a slideshow in which the company introduced the character of “Vulture Man,” designed to mock and antagonize Elliott Management CEO Paul Singer. The caption reads “Who is Elliott Hedge Fund?”
A bitter fight between a New York City financial powerhouse and the most important company in Korea has taken an ugly turn with media outlets either sympathetic to or outright controlled by Samsung lobbing anti-Semitic bombs at Paul Singer and his Elliott Management fund.
First some background.
Not everyone is thrilled with the terms of the merger, which would place Cheil, which is already 42% owned by the Lee family, even more firmly under the control of the family plus grant them the nice chunk of Samsung Electronics that’s held by Samsung C&T. Samsung Electronics is the jewel in the Samsung crown and the Lee family actually holds a smallish stake in Samsung Electronics. The New York-based hedge fund Elliott Associates, which owns 7.12 percent of Samsung C&T, has been harshly critical of the terms, charging that the deal dramatically undervalues C&T’s stock in an effort to hand a bargain to Cheil and the Lee family.
Elliott is hardly the only entity opposing the deal. The advisory firm Korea Corporate Governance Service, which is somewhat analogous to proxy advisory firm Institutional Shareholder Services in the States, is said to have recommended that the Korean National Pension Service (NPS)—which had owned 10% of C&T and actually acquired a bunch more after the merger was announced—reject the merger. And even that rumored recommendation has been controversial, since KCGS recommendations are issued in secrecy and rarely trickle out. For its part, Institutional Shareholder Services itself produced an analysis that also concluded Cheil was dramatically underpaying for C&T. The merger needs 66.67% of the voted shares to vote yes to proceed.
Anyway, what looked like a garden variety fight pitting acquirer who wants a bargain versus target who wants a payday has turned into an unusual and unfortunate culture war between the traditional Korean business custom of powerful “chaebol”— family-led conglomerates—and a Western style fight for transparency and competitive bidding. And then it got anti-Semitic.
Last week, the South Korean business press began attacking Elliott Associates, noting specifically that it has a Jewish owner and chief executive, Paul Singer. The business news site Mediapen.com has led the way, having published five stories on its homepage about the deal, including one valentine to the wisdom and integrity of Samsung’s leadership and four supporting the merger under the current tems. Last Sunday, writer Kim Ji-ho chimed in on the Samsung-Elliott dispute: “Jews are known to wield enormous power on Wall Street and in global financial circles … It is a well-known fact that the US government is swayed by Jewish capital.”
“Jewish money” also was said to explain why the independent “referees” of these deals also sided with Elliott. After ISS also opposed the terms of the deal, Mediapen bizarrely attacked them along the same lines. Kim wrote that “ISS will be supportive of Elliott’s claims because ISS, like Elliott, is founded upon Jewish money. Elliott’s CEO is Paul Singer, a Jew. ISS is an affiliate of MSCI, which is owned by Jewish major shareholders. … ISS’s opposition to the merger can be interpreted along the lines of Jewish alliance. Jewish money has long been known to be ruthless and merciless.” The story was illustrated by a photo of Mr. Singer, who is identified in the caption as the “greedy, ruthless head of a notorious hedge fund.”
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