Samsung Electronics Co.’s plan to demerge it into separate holding and business establishments may not happen this year, the company’s Vice Chairman Kwon Oh-hyun hinted, citing possible adverse effects from a hasty transition.
“Current conditions make it difficult for progress in the transition,” said Kwon who doubles as the chairman of the board of directors during the 48th general shareholders meeting held in Seoul on Friday.
As splitting the company into holding and operating entities is a very grave decision to both shareholders and management, the company is looking into all aspects including legal issues and taxation rules as well as all possible ramifications, said Kwon.
Samsung Electronics in November voiced plan for reorganization to meet shareholders’ expectations including the option of reorganization into holding structure. An outline was expected as early as May.
Samsung announced a set of actions including the dismantlement of the group-wide control tower Future Strategy Office for greater transparency in management and non-operating spending following the arrest of vice chairman and group’s de facto leader Jay Y. Lee on bribery charge in connection with the group’s donations to private organizations run by a friend of former President Park Geun-hye.
The company is nevertheless pursuing with the reorganization plan by establishing a governance review committee by the end of April.
The governance committee will be formed entirely of outside directors, said Kwon. They will also act as an auditor of corporate social responsibility projects as well as other management decisions that could influence shareholders’ value.
The company has a trouble of recruiting outside directors especially from abroad due to various “unfavorable conditions,” he said.
Kwon reiterated the company’s commitment to the buyback program. The company will pay out dividends quarterly throughout this year. Samsung in November pledged cash dividend payout of nearly 4 trillion won ($3.6 billion) for 2017, up 30 percent from 2016, and buy back shares worth 9.3 trillion won to bolster shareholders’ value.
Shares of Samsung Electronics ended Friday at 2,075,000 won, down 15,000 won or 0.72 percent from the previous session.
By Song Sung-hoon
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