Shareholders Call For Samsung To Split In Two; Korean Tech Giant Considering The Proposal?

This year has not been Samsung's best as the multinational conglomerate company has been huddled by controversy throughout 2016. The infamous incidents with the Galaxy Note 7 along with the recall of 2.8 million washing machines has led shareholders to call for the South Korean tech giant to split in two.

Samsung is scheduled to publicly disclose changes on Tuesday which will supposedly boost the amount of profit the investors will be receiving. In a report by Reuters, it is stated that Samsung's shareholders are asking Samsung to split into a holding company and an operating company.

As some shareholders call for split, Samsung will announce plans to boost value https://t.co/W0Hx0uWrZt

— Paulmears (@paulmearsuk) November 28, 2016

Product recalls have not been the only problem for Samsung this year; political controversy has reportedly led the company headquarters in Seoul, South Korea to be raided on two separate occasions, as per Cnet. Subsequently, investors have voiced out their considerations about the company.

An anonymous source quoted by Seoul Economic Daily had previously been cited by Reuters saying that Samsung is considering the split as proposed by the company's shareholders. However, Samsung has not officially confirmed this report.

The US-based firm, Elliot Management, which holds a 0.6 percent stake in Samsung, is leading the call for the company to split. The hedge fund also wishes to see Samsung add three independent board members, list shares on the stock market of the US, and a $26 billion special dividend payout to its shareholders.

According to a separate report by Cnet, activist investors often pester companies to be more generous with regards to shareholder payouts and force struggling associations make hard decisions about their future. Apple, Dell, and eBay have been targeted by billionaire Carl Icahn in recent years, while Chris Sacca pressured Twitter to name a permanent CEO in 2015.