As part of the shareholder's return policy, Samsung Electronics has repurchased or cancelled its shares since October 2015. Accordingly, according to the industry, this will allow Samsung Group's financial subsidiaries to hold shares in Samsung Electronics to more than 10% this year. And the market is paying close attention to how they are going to deal with the outgoing shares.
To meet regulatory requirements, Samsung's life insurance and Samsung's financial subsidiaries such as fire and marine insurance plan to sell their shares beyond 10% parts by the end of this year.
South Korea's financial regulator revealed the information today. An official from the financial sector said:
The relevant law refers to the Republic of Korea
By the end of last year, Samsung Life Insurance and Samsung fire and marine insurance held 8.23% and 1.44% shares of Samsung Electronics, respectively. If Samsung Electronics continues to buy back shares this year, the total shares of the two companies are expected to reach 10.3% at the end of this year. Samsung can ask the Korean Financial Services Committee to allow the two companies to hold 0.3% of their shares, but the group has decided to sell the shares. This is because, because of Samsung's vice-president Li Zairong's century trial, Samsung or it is difficult to get the relevant license. At the same time, the company also wants to avoid unnecessary speculation.
However, Samsung did not report its plans to the FSC, including when, how and to whom. One investment banker said:
Samsung also needs to decide which company to sell
Investment bankers point out that the financial regulatory authorities in Korea should grant Samsung permission, because the two subsidiaries are overweight because Samsung Electronics has been buying and canceling shares in recent years. In recent years, Samsung has written off a lot of shares and returned the earnings to shareholders to push up the stock price. As the Samsung Group's financial subsidiaries sell stocks in the market, the share price of Samsung Electronics is likely to fall because the supply of its stock has increased. It is reported that the Samsung Life Insurance Co plans to sell the earnings of Samsung Electronics shares for shareholder friendly projects.