SEOUL, South Korea (AP) – South Korea’s former health minister was convicted on Thursday of pressuring the country’s pension fund to support a controversial Samsung merger, in one of the first rulings on key players in the corruption scandals that ensnared the country’s ousted president and Samsung’s heir.
The merger of Samsung C&T and Cheil Industries in 2015 was crucial in Samsung’s father-to-son leadership succession, but U.S. hedge fund Elliott Associates and other minority shareholders opposed the plan arguing that it would unfairly benefit Samsung founding family members.
Support from the National Pension Service, a key investor in Samsung, was crucial to ensure shareholder approval. Thanks to the pension service’s vote, Samsung narrowly won the approval, helping Samsung Vice Chairman Lee Jae-yong consolidate his control over South Korea’s largest business conglomerate.
The Seoul Central District Court said Moon Hyung-pyo, then head of the Health Ministry that oversaw the National Pension Service, was sentenced to 2 ½ years in prison. He was found guilty of abusing power to sway the pension fund’s vote on the merger. He was also guilty of perjury during a parliamentary hearing, lying about his role in the merger.
Moon has violated the pension fund’s independence, the court said in a statement.