The People Power Party (PPP) is set to propose an amendment to the Capital Markets Act, which includes pinpoint regulations. On December 3, during a party strategy meeting at the National Assembly in Yeouido, Seoul, Kim Sang-hoon, the policy committee chairman of the PPP, stated, “Is there a real need to push for the amendment of the Commercial Act, which companies and the market strongly oppose, as stated by Lee Jae-myung, the leader of the Democratic Party?” He urged for active discussions on amending the Capital Markets Act, which aims to protect shareholders’ interests without harming corporate competitiveness.
Kim emphasized that the amendment to the Capital Markets Act involves reasonable pinpoint regulations. He highlighted that if this amendment were to be implemented, it would eliminate the necessity for changes to the Commercial Act, which Lee previously mentioned as significant.
He warned that should the Commercial Act amendment proceed, experts predict that Korean companies may face unpredictable repercussions due to aggressive attacks and lawsuits from global hedge funds.
Additionally, Kim noted that, according to media reports, the global activist fund Dalton Investments welcomed the Democratic Party’s push for the Commercial Act amendment, considering it as excessively favorable.
The PPP plans to soon introduce an amendment to the Capital Markets Act with specific regulatory measures. The key proposals include establishing special provisions for shareholder protection, incorporating the actual value of companies when determining merger prices, and allocating up to 20% of newly issued public stocks to parent company shareholders during the subsidiary’s listing following a physical division.
Kim concluded that the amendment would apply a rational and selective regulation approach limited to the 2,464 listed companies on the KOSPI and KOSDAQ, rather than the entire 1.02 million corporations, thus maximizing the protection of ordinary shareholders.