Rumors have been circulating that chief of Hanwha Investment & Securities Ju Jin-hyeong would be replaced on the grounds that he released negative reports about Samsung’s latest merger.
Speculation has been mounting in the financial circle that the firm's negative report about the merger between Samsung C&T and Cheil Industries would lead to the replacement of the firm’s chief, according to local media outlets.
In March, Ju announced his firm would retain "neutral" and "sell" ratings at around 40 percent of the total investment reports, turning the local financial market upside down.
Since most listed companies are key clients of securities firms, analysts do not usually release negative reports about the companies here in South Korea.
Out of 29,000 analysis reports released from January in 2014 to this May, only 35 reports (0.1%) issued "sell" rating. Hanwha issued the highest number of "sell" ratings among the securities firms.
Prior to the merger, Hanwha provided a series of reports, stating that "The merger between Samsung C&T and Cheil Industries may founder," with the fierce battle between Samsung Group and Elliott Group ongoing.
In July, Hanwha said, "The battle between Samsung and Elliott became fiercer to win the voting and this created further confusion among investors," adding that, "Although there are many variables prior to the general stockholders' meeting, the possibility of the failure in merger has gone up."
This is in stark contrast to reports released by other securities who said that if the merger failed, it would largely bring down share prices of Samsung C&T Corporation. At the time, Samsung C&T were demanding small shareholders to vote yes for the deal.
Amid Samsung Group’s pushing ahead with a "big deal," the series of the firm’s negative reports could have pressured executives of Hanwha group.
A securities expert declining to be identified said, "In effect, releasing negative reports including "sell" ratings can be a burden to securities firms," adding that, "I was surprised to see the negative reports released by Hanwha amid Samsung's ongoing big deal."
