Samsung Everland’s restructuring heralds corporate governance change

November 6, 2013 Leave a comment

Samsung Everland’s restructuring heralds corporate governance change

Lee Sang-gyu

2013.11.05 17:03:45

With Samsung Everland looking to shake up its business portfolio, this could be interpreted as a signal of Samsung Group transforming its corporate governance to ensure the succession of management rights. This is because Samsung Everland is at the top of the Group’s corporate governance and thus will play the most vital role in handing over management rights, according to experts. Regardless of how the conglomerate’s corporate governance is rearranged, Samsung Group ultimately aims to boost the value of Samsung Everland.

Samsung Everland recently took over a fashion business of Cheil Industries to secure a cash cow and growth engine. The move seems to be in line with the Group’s efforts to enhance the value of Samsung Everland.
Samsung Everland, meanwhile, decided to split off meal provision and food ingredient business into “Samsung Welstory” and sell building maintenance business to S1, an integrated security solution provider, at 480 billion won ($451.7 million) Monday.
As a result, Samsung Everland will be restructured into three business units, fashion bought from Cheil Industries, engineering and asset (E&A) excluding building maintenance, and leisure next year.
“The restructuring of Samsung Everland lays groundwork for strengthening corporate value in the future by obtaining growth engine and cash,” said Lee Sang-hun, a market strategist at Hi Investment $ Securities. “The rearrangement of business portfolio is the first step for changing corporate governance.”
The integral part of changes in Samsung Group’s corporate governance is that Samsung Everland becomes a holding company with an influential stake to achieve stable governance of Samsung Group’s affiliates including Samsung Electronics, the market strategist said.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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