Promoting the revision of the Capital Markets Act instead of the Commercial Act... "Protecting Small Shareholders"

[Anchor]
The government has decided to strengthen the protection of minority shareholders by revising the Capital Markets Act instead of the Commercial Act.

The purpose is to prevent excessive litigation and reduce difficulties in management activities by limiting the subject and behavior of the regulations that are applied to the business community.

I'm reporter Lee Hyungwon.

[Reporter]
In 2020, LG Chem separated its battery business into LG Energy Solution.

There was strong opposition from general shareholders, so-called "ant" investors, but the physical division was carried out.

[BAE KYU SUN / Small investors (last 2020): Everyone is against it. You're going to lose money. Stock prices keep falling. I hope it will be voted down.]

In July, Doosan Group tried to incorporate its net affiliate Doosan Bobcat into Robotics, but ended its merger plan due to opposition from minority shareholders.

In this way, the revision of the commercial law has been discussed in the political circle to prevent shareholders from being damaged by corporate mergers or divisions.

The business community strongly protested when the revision was pushed to expand the scope of the board's duty to be faithful to the "shareholders" centered on the Democratic Party.

[Kim Chang-beom / Full-time Vice President of the Korea Business Association (last month): The revision of the Commercial Act can cause significant disruptions to the overall business management, so other approaches such as the revision of the Capital Market Act will be desirable.]

The government accepted this and started to revise the Capital Markets Act.

Starting with President Yoon Suk Yeol earlier this year, he ignited the revision of the commercial law first, but changed his position.

First of all, the board of directors must disclose the purpose and effectiveness to protect shareholders during mergers or divisions.

In addition, the standard for calculating the value of the merger was removed and the stock price and asset value were considered comprehensively.

If a subsidiary is listed after the physical division, it will also provide a basis for preferential allocation within 20% of the new shares of the public offering to general shareholders.

The government emphasized that the Capital Markets Act is less restricted in litigation or management activities by limiting the subject and behavior of regulations than the commercial law of general corporations.

[Kim Byung-hwan / Chairman of the Financial Services Commission: (The amendment to the Capital Markets Act) will be limited to listed corporations, and (the applicable acts) will be limited to four actions to solve the uncertainty of daily management activities caused by the revision of the Commercial Act.]

The government is submitting an amendment to the National Assembly this week, and the Democratic Party is still proposing a revision to the commercial law as a party platform.

However, attention is being paid to whether Lee Jae-myung will be able to draw a dramatic compromise during the parliamentary discussion as he leaves room for not revising the commercial law if the revision of the capital market law is made reasonably.

I'm Lee Hyungwon of YTN.

Edit Video: Han Soo-min

Design:Baek Seungmin