A bitter corporate showdown with implications for the future of South Korea’s largest conglomerate took an unexpected twist in recent days, with screeds appearing in media outlets warning of the “ruthless and merciless” power of a nefarious “Jewish alliance.”

On July 17, the shareholders of Samsung C&T, a construction company that is part of the vast, sprawling corporate empire under the control of Samsung Group, are set to vote on a merger with Cheil Industries, another Samsung subsidiary. The merger is part of a complicated consolidation underway within the conglomerate’s network of some 80 interlinked companies that is meant to secure control of the company in the hands of its founding family ahead of the expected death of its 73-year-old patriarch and Samsung Group chairman – and South Korea’s richest man – Lee Kun-hee.

The most outspoken critic of the merger, New York-based hedge fund Elliott Associates, which owns 7 percent of Samsung C&T, has charged that the merger’s terms dramatically undervalue C&T’s stock, effectively favoring the shareholders of Cheil, which is 42% owned by the Lee family, according to media reports. The Lee family would control the post-merger company.

The row has generated intense scrutiny in South Korea. Samsung is the country’s largest chaebol, the Korean term for the labyrinthine family controlled conglomerates that dominate, and critics say stifle, the country’s economy. Elliott’s accusation that the C&T-Cheil merger is intended to favor the needs of controlling stakeholders – that is, Lee family members – rather than the long-term welfare of the two companies or the investments of minority shareholders has struck a chord.

Samsung Group chairman Lee Kun-hee, Washington D.C., May 8, 2013. (Chong Wa Dae/Wikipedia/Flickr/CC BY-SA 2.0)

Samsung Group chairman Lee Kun-hee, Washington D.C., May 8, 2013. (Chong Wa Dae/Wikipedia/Flickr/CC BY-SA 2.0)

The Korean National Pension Service, the South Korean pension system which owns a 10% stake in C&T, is thought to hold the decisive vote at next week’s shareholder meeting. NPS has not said how it will vote, but on Wednesday reports surfaced that the advisory firm Korea Corporate Governance Service recommended that NPS reject the merger. Since the KCGS recommendation is supposed to be confidential, the mere fact that it was leaked has been seen by some observers as an indication that there is a fight within NPS over the vote, one that has spilled over into media outlets such as MoneyToday (Korean-language link), one of the country’s largest financial news sites.

What began as a duel between rival investors over the financial terms of a merger has transformed into a culture war, pitting the expectations of a diverse coalition of foreign and minority investors – western firms such as Elliott have been backed by local groups of South Korean populists and C&T investors, one of which was described by the Wall Street Journal as consisting of “2,500 retirees, professionals and others…following Elliott’s lead” – against the generations-old culture of family led conglomerates.

As the significance of the merger was magnified by these social and cultural tensions, some South Korean journalists began to note the fact that the most prominent rabble-rouser jeopardizing the merger, Elliott Associates, had a Jewish owner and chief executive, Paul Singer.

One South Korean news site, Mediapen.com, has been outspoken on the C&T-Cheil merger. At the time of writing, Wednesday evening, the site had no fewer than five articles about Samsung on its homepage, one a glowing profile of Samsung’s corporate leadership and the other four expressing support for the merger.

Among these was a Sunday column by journalist Kim Ji-ho (Korean-language link), who framed the Elliott-Samsung feud in stark terms.

“Jews are known to wield enormous power on Wall Street and in global financial circles,” Kim began. “It is a well-known fact that the US government is swayed by Jewish capital.”

The vitriol in Kim’s column is pervasive. In a caption under Singer’s picture, the Jewish investor is described as a “greedy, ruthless head of a notorious hedge fund”

Railing against Institutional Shareholder Services, or ISS, a proxy advisory firm that published an analysis of the merger that agreed with Elliott’s claims of C&T’s undervaluation, Kim explained to Mediapen’s readers that ISS was moved to side with Elliott because both represented “Jewish money.”

“The rationale for the assumption that ISS will be supportive of Elliott’s claims is that ISS, like Elliott, is founded upon Jewish money. Elliott’s CEO is Paul Singer, a Jew. ISS is an affiliate of MSCI, which is owned by Jewish major shareholders,” he wrote. And he added: “ISS’s opposition to the merger can be interpreted along the lines of Jewish alliance. Jewish money has long been known to be ruthless and merciless.”

The Times of Israel has not investigated whether MSCI, formerly Morgan Stanley Capital International but no longer affiliated with Morgan Stanley, is Jewish-owned, but it can confirm that it does not own ISS, which it sold in April 2014.

The vitriol in Kim’s column is pervasive. In a caption under Singer’s picture, the Jewish investor is described as a “greedy, ruthless head of a notorious hedge fund.”

Samsung itself advertises on Mediapen, offers interviews and media access, and receives almost total support from the site’s reporters and columnists. But Mediapen is nevertheless not one of South Korea’s major media outlets.

Seoul-based MoneyToday is.

In a June 22 report (Korean-language link) about Samsung’s response to the ISS report, the site explained why ISS might not be an objective party in the merger dispute.

“According to the finance industry, the fact that Elliott and ISS are both Jewish institutions cannot be ignored,” it reported. “Elliott is led by a Jew, Paul E. Singer, and ISS is an affiliate of Morgan Stanley Capital International (MSCI), whose key shareholders are Jewish. According to a source in the finance industry, Jews have a robust network demonstrating influence in a number of domains.”

The report on the mainstream MoneyToday was published almost two weeks before the appearance of the Mediapen report.

And there is no sign that the narrative of Samsung being victimized by a global cabal of Jewish financiers is dying down. The South Korean daily Munwha Ilbo followed up on Tuesday with a report headlined: “‘Jewish ISS’ blatantly supported ‘Jewish Elliott.’

“Doubts are being raised about a possible ‘Jewish alliance’ as ISS issued a report which ignored the domestic judicial system and simply relayed Elliott’s claims,” the tabloid reported. “Elliott is led by Paul Singer, who is Jewish. ISS is an affiliate of MSCI, owned by Jewish major shareholders.”

Nine days remain till the fateful vote that will affect the future of South Korea’s largest company, nine days of feverish media attention in which the Jewish identity of one hedge fund CEO opposed to the merger appears set to play an uncomfortably central role.