Yang Hyang-ja: "'3 Billion Won Major Shareholder' Unreasonable... Democratic Party Will Find Ways to Support Donghak Ants"

[Image source=Yonhap News]

[Asia Economy Reporter Wondara] Voices are increasingly calling for the Democratic Party of Korea to revise the policy of lowering the major shareholder threshold to 300 million KRW.

Yang Hyang-ja, a Supreme Council member of the Democratic Party, said at the Supreme Council meeting held at the National Assembly on the morning of the 5th, "Revitalizing the capital market is a policy direction of our government," and added, "We need to carefully examine whether lowering the major shareholder threshold to 300 million KRW contradicts the government’s policy direction."

She stated, "We should first review the origin of the 300 million KRW major shareholder standard. We also need to properly assess whether grouping the major shareholder criteria by family unit aligns with international standards," and added, "It does not seem reasonable to ask family members what stocks they hold and how much every time stocks are purchased."

She also emphasized, "Domestic individual investors bought stocks worth 9 trillion KRW through the 'Donghak Ant Movement,'" and said, "Considering this, the impact of easing the major shareholder criteria on our stock market will be quite significant. This impact must also be accurately predicted."

Supreme Council member Yang said, "It was the Donghak Ants who protected the domestic stock market, which could have been at risk due to the COVID-19 crisis," and added, "Now, the government and the ruling party will find ways to support the Donghak Ants."

She proposed, "Benefits that encourage individual investors’ enthusiasm should also be prepared," and suggested, "We should discuss introducing tax reductions on capital gains from long-term stock investments." She continued, "Angel investment in promising companies is a long-term investment, not short-term speculation. Our government’s capital market revitalization policy aims to suppress speculation and encourage investment."

Earlier, Kim Tae-nyeon, floor leader of the Democratic Party, said at a press conference the previous day, "We are listening carefully to the opinions and complaints of many Donghak Ant investors," and added, "The party’s Policy Committee and relevant standing committees are thoroughly reviewing this issue. Through party-government consultations, adjustments will be made to an appropriate level." However, he noted, "The easing of the major shareholder classification will not be implemented immediately. Since it will start next year, there is enough time for party-government consultations and further review."

Meanwhile, the Ministry of Economy and Finance planned to lower the threshold for classification as a major shareholder from 1 billion KRW to 300 million KRW starting April next year. According to this, shareholders holding more than 300 million KRW in a specific stock will be classified as major shareholders under tax law and will have to pay 22-33% tax on capital gains (excluding basic deduction, including local tax) from April next year. The stock holding amount is calculated by aggregating stocks held not only by the shareholder but also by spouses (including common-law partners), parents, grandparents, great-grandparents, children, grandchildren, great-grandchildren, and special related parties such as management control-related corporations, based on direct lineal ascendants and descendants.

This content was produced with the assistance of AI translation services.