The global fund Sovereign Asset Management has disappeared from Korea without a trace after walking away from a two-year managerial tug-of-war with SK Group with stellar profits.
Sovereign sold off its remaining 7.2 percent in LG Electronics and 7.0 percent in LG Corp,hollister pas cher. in after-hours trading at the Korea Exchange,hollister. Foreign investors bought 8,abercrombie.4 million shares in LG Electronics and 6.7 million shares of LG Corp. while the rest went to local investors.
Sovereign sent shock waves through the Korean business sector by claiming the SK stock price would stagnate until the corporation??s chairman Chey Tae-won resigned after it bought a controlling share in SK Group in 2003,air jordan pas cher. The fund cast doubt on Chey??s qualifications, citing his arrest for insider trading,air jordan. But notwithstanding the hostile foreign takeover and evidence of slack ethics at the conglomerate,woolrich, SK shareholders twice defeated Sovereign??s attempts to oust Chey. The fund washed its hands of SK last month but earned a staggering W900 billion (about US$900 million) in the process, making its reclusive owners, the Chandler brothers, New Zealand??s richest individuals,hollister.
The fund stoked anticipation of another squabble by buying up shares in LG Group subsidiaries but left without making more waves,hollister.
The Korea Exchange said that Sovereign lost W50.2 billion in its investment in the LG businesses as losses from LG Electronics outweighed W51,hollister france.3 billion profits from LG Corp. The tax haven-based company is assumed to have lost a total of W63,abercrombie uk.7 billion including losses from the exchange rate and trading tax. That still barely dents its W921 billion net gains from SK in profits and dividends.
Investors expecting the struggle over SK management to continue and drive up the share price scrambled to buy its stocks — and as a result the price promptly did go up. But in LG??s case the governance structure proved too solid for such a strategy and the stock price remained steady for six months.
So was it all a ploy? Most securities experts and businesspeople dismiss Sovereign as a speculator, its ostensible commitment to corporate transparency a mere ruse. Kim Gyeong-sin, an executive with Hanyang Securities, says the fact that it sold its stake in LG within less than six months ??also proves that it is not a sincere investor who truly wants to participate in management.??
But some say that regardless of intent,hollister, Sovereign taught the Korean economy a valuable lesson. Without the Sovereign kerfuffle, SK would not have been forced to adopt a more shareholder-centered management and other companies would not have increased dividends for shareholders.
Other SK shareholders, after all,beats by dre, also benefited from the rise in stock price after Sovereign came in. ??We must view the Sovereign incident as a positive stimulus for the country??s economy,?? says Choi Hong, the president of domestic asset management firm Landmark. ??Korean funds should also try to earn money by actively investing overseas.??
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Chaebol owners and their families did not own a single stake in 60 percent of their affiliates, which they retain indirect control of via the cross-ownership rights of related affiliates.
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