No takeover threat of Samsung Elec: Minister

SEOUL: South Korea's finance minister Lee Hun-jai said he saw no possibility of Samsung Electronics Co. Ltd., the world's top memory chip maker, becoming a target for a hostile takeover.

His remarks came at a weekly news conference amid media reports that Samsung's management is worried that regulations on share cross-holdings among subsidiaries could make Asia's most valuable technology firm fall victim to foreign takeover.

"There is no possibility of Samsung Electronics being exposed to an M&A (merger and acquisition), and I think that would have already taken place if management capability was at such (weak) level," Lee told reporters.

South Korea limits the voting rights of financial units in conglomerates, in a controversial move to loosen the grip many family-run holding companies have over publicly listed firms.

Samsung Electronics, the crown jewel of South Korea's top conglomerate, the Samsung Group, has expressed concern about the side effects of the new restrictions.

Earlier this year, Samsung said in a report sent to the Fair Trade Commission that restricting voting rights could make it more vulnerable to hostile takeover bids because it did not apply to foreign investors.

South Korea's sprawling family-run business groups dominate much of the economy and often control subsidiaries via complicated cross-ownerships.

The heavy borrowing and dubious business practices of many of the chaebol were blamed for sending South Korea close to bankruptcy during the 1997-98 Asian financial crisis.

Samsung shares, nearly 60 percent owned by foreign investors, was down 0.22 percent at 459,000 won at 0336 GMT.