Samsung, the world's largest memory chipmaker and fourth largest mobile phone manufacturer, is facing allegations that it misled a group of overseas investors over its finances.
The investors, which include Deutsche Bank, HSBC, Invesco and US-based hedge fund managers Elliott Associates, have launched a campaign to prevent a rule change which stops them converting preference shares into ordinary stock.
But the chipmaker dismissed the charges as "outrageous" and maintained that the campaigners are pursuing a "narrow agenda" against company interests.
Shareholders have claimed that Samsung ignored their demands that it keep the status quo and are expected to challenge the company at its annual meeting in Seoul today (February 27).
However, analysts at UBS Warburg have come out on Samsung's side saying that the company has been unreasonably singled out by a small group of shareholder activists keen to make profits.
The dispute revolves around the status of 24 million preference shares issued between 1989 and 1996. Shareholders believed that these would automatically be converted to common shares when they reach maturity after 10 years.
Samsung has insisted that the rights only applied to preference shares issued after 1997, of which there are none.
The company faced criticism from shareholder groups before last year's annual meeting for using a corporate governance award to exaggerate improvements it had made in its standards, and blocking the appointment of an independent director.
Samsung is majority owned by foreign investors, who have forced it to become more accountable.
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