Samsung Life Insurance Co. said it currently does not have specific plans to sell its stake in Samsung Electronics, a necessary procedure to meet regulations for a financial holding entity.

“We don’t have any specific plans on selling our shares in Samsung Electronics,” said Samsung Life Insurance President Kim Chang-soo during a 2016 meeting with institutional players to report on fiscal 2016 settlements.

The comment comes after independent counsel accused Samsung Group of requesting a wide range of favors from government authorities in return for its handsome donations to questionable groups run by Choi Soon-sil at the suggestion of President Park Geun-hye. It suspected the conglomerate lobbied for relaxing in regulations to facilitate the transition of the life insurer into a financial holding entity to command various financial units of Samsung, including lowering of stake in non-financial unit like Samsung Electronics.

Samsung Life is the largest single shareholder of Samsung Electronics with 7.9 percent as of the end of January. Under local regulations, a financial holding company cannot own sizable stake in non-financial units.

It would cost about 15 trillion won to 16 trillion won - more than 50 percent of Samsung Life’s equity capital - to dispose the entire stake in Samsung Electronics.

“There is a lot to consider in the stake sales as it would affect tax payment and returns for with profit policyholder, along with tougher capital regulations,” said Kim when asked about the possible sell-off plan. “All I can say right now is that we would do our best to make the arrangement profitable for our policyholders and shareholders,” he added.

shares of Samsung Life Insurance closed Monday at 105,500 won, down 0.47 percent or 500 won from the previous session. Those of Samsung Electronics ended at 1,933,000 won, up 2.11 percent or 40,000 won.

By Bae Mi-jung

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