April 17, 2008 at 12:00 pm by Tom Lydon
Samsung’s chairman is in hot water, and it’s weighing on South Korea’s exchange traded fund (ETF), which counts the company as a major component.
Chairman Lee Jun-hee was indicted on tax evasion and breach of trust charges, reports Jae-Soon Chang for the Associated Press. However, tycoons in South Korea are considered "indispensable," so prosecutors chose not to arrest him, saying it would cause "enormous disruptions" to Samsung’s corporate management and impact the economy.
Samsung is particularly important to South Korea’s economy: it employs about 250,000 people in 60 businesses, and its sales make up almost one-fifth of the country’s gross domestic product.
Lee has hinted that he might step down.
iShares MSCI South Korea (EWY) is down 9.2% year-to-date. Samsung is the fund’s largest component, with 15.3% of assets.
Tags | Asia, South Korea, UNG
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