Hong Nam-ki "Introduction of Multiple Voting Rights for Unlisted Ventures... Limit of 10 Voting Rights per Share" (Update)

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance

[Asia Economy Reporter Kwangho Lee] The government has decided to allow unlisted venture companies to issue multiple voting rights if they receive shareholder approval when faced with a threat to their management rights.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held the 18th Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting at the Government Seoul Office on the 16th and stated, "In cases where the founder of an unlisted venture company faces a threat to management rights due to investment attraction, we plan to allow the issuance of multiple voting rights with up to 10 votes per share, subject to approval by more than three-quarters of the shareholders."

The government considers a "threat to management rights" as a situation where cumulative investment exceeds 10 billion KRW, and the last new investment exceeds 5 billion KRW, causing the founder's stake to fall below 30% or resulting in the loss of the largest shareholder status.

Deputy Prime Minister Hong said, "Even if the venture company grows into a mid-sized company, the multiple voting rights will be maintained."

He added, "In cases where the issuing company goes public, the multiple voting rights will expire after a three-year grace period to ensure that multiple voting rights sufficiently support corporate growth."

Furthermore, he mentioned, "To thoroughly prevent the abuse of multiple voting rights as a means of illicitly strengthening control, the exercise of multiple voting rights will be restricted in matters such as the appointment and dismissal of auditors and the remuneration of directors."

He also added, "In cases of inheritance or transfer of shares or incorporation into a large corporation, the multiple voting rights will naturally expire."

The government plans to prepare a bill to amend the Special Measures for the Promotion of Venture Businesses Act to allow multiple voting rights for unlisted venture companies and submit it to the National Assembly within this year.

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