The Democratic Party of Korea has assessed that the institutional foundation for enhancing shareholder value and advancing the capital market has been completed following the passage of the ‘Third Amendment to the Commercial Act’, which mandates the compulsory redemption of treasury stocks. The photo shows Han Byung-do, the Democratic Party’s floor leader, delivering a speech at the policy coordination meeting held at the National Assembly in Yeouido, Seoul, on the 26th.
With the ‘Third Amendment to the Commercial Act’, which includes the compulsory redemption of treasury stocks, having been passed in the National Assembly plenary session, the Democratic Party has announced its intention to swiftly advance remaining capital market reform tasks such as the Stock Price Manipulation Prevention Act and the expansion of the stewardship code.
Han Byung-do, the Democratic Party’s floor leader, stated in a policy coordination meeting at the National Assembly in Yeouido, Seoul, on the 26th, “The Korean economy is progressing rapidly. Yesterday, the KOSPI index surpassed 6,100 points, achieving a significant milestone just a month after reaching 5,000 points.” He further emphasized, “On the day the KOSPI surpassed 6,000 points, we passed the Third Amendment to the Commercial Act, which enhances shareholder value through compulsory redemption of treasury stocks and strengthens protection measures for minor shareholders.”
On the 25th, the National Assembly passed the Third Amendment to the Commercial Act, which mandates the redemption of treasury stocks within one year by listed companies, aiming to prevent the misuse of treasury stocks to extend major shareholder control and enhance shareholder value. Existing treasury stocks must be redeemed within one year from the date that is six months after the law takes effect, and companies with restrictions on foreign investment must dispose of them within three years.
Floor leader Han stated, “The First Amendment to the Commercial Act established principles where shareholder voices are central to corporate management, and the Second Amendment addressed opaque practices, increasing fairness and accountability in the capital market. The Third Amendment completes the foundation for a healthy capital market where corporate innovation growth and shareholder value enhancement form a virtuous cycle.”
He added, “Through remaining capital market reforms such as the Stock Price Manipulation Prevention Act, the Korean-style Discovery (evidence disclosure) system, and the expansion of the stewardship code, we will usher in the Korea Premium era.”
Han Jeong-ae, the Democratic Party’s Policy Committee Chair, mentioned, “Since the inauguration of the Lee Jae-myung government, the party and the government have promoted three amendments to the Commercial Act, focusing on resolving the Korea Discount and protecting shareholder rights. The passage of the Third Amendment in the plenary session yesterday has completed the legal foundation for shareholder returns, including the institutionalization of treasury stock redemption.”
Policy Committee Chair Han emphasized, “The results are clearly demonstrated by the KOSPI reaching 6,000 points,” and assured that “the party and government will continue to unwaveringly advance in a direction that enhances the competitiveness of the industry and the entire market, communicating with the market.”