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

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Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is presiding over the 18th Emergency Economic Central Countermeasures Headquarters meeting held at the Government Seoul Office Building on the 16th.

[Asia Economy Reporter Kwangho Lee] The government has decided to allow unlisted venture companies to issue multiple voting rights if they obtain shareholder approval when facing threats to their management rights.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated at the 18th Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting held at the Government Seoul Office on the 16th, "For unlisted venture companies where the founder's management rights are threatened by investment attraction, we plan to allow the issuance of multiple voting rights with up to 10 votes per share upon approval by more than three-quarters of shareholders."

The government had previously announced in the second half of June's economic policy direction that it would allow unlisted venture companies to issue multiple voting rights so that founders can attract large-scale investments and grow their companies without concerns about dilution of management rights.

The government considers cases where cumulative investment exceeds 10 billion KRW and the last new investment exceeds 5 billion KRW, resulting in the founder's stake falling below 30% or losing the status of the largest shareholder, as situations where management rights are threatened.

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."

Hong also 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 directors' remuneration."

Furthermore, he added, "In cases of inheritance or transfer of shares or incorporation into large corporations, multiple voting rights will naturally expire."

The government plans to prepare an amendment to the 'Special Measures for the Promotion of Venture Businesses Act' soon and submit it to the National Assembly within this year.

At the meeting, the operation plan for the large corporation-startup win-win cooperation ('Dae-Star Solution') platform was also discussed. Deputy Prime Minister Hong explained, "The government plans to officially operate the 'Dae-Star Solution Platform' from next year after concluding the pilot project in November, where large corporations publicly request technologies and items they need from startups, and startups propose solutions to large corporations."

The government is currently conducting pilot projects such as 'The Power of Connection, Digital Dream9' and the 'Artificial Intelligence (AI) Championship.'

Deputy Prime Minister Hong stated, "We will operate a dedicated system within the Korea Institute of Startup & Entrepreneurship Development to regularly announce and receive problem discoveries targeting large corporations and senior ventures. We will select excellent problems related to big data and the Fourth Industrial Revolution and hold hackathon-style competitions quarterly or semi-annually."

The government plans to support collaborative startups not only with large corporations' equipment, data, and global networks but also by linking government research and development (R&D), commercialization funds, and consulting to ensure that cooperative projects ultimately lead to joint commercialization.

Deputy Prime Minister Hong also said, "The eight major consumer coupons, which were suspended due to the resurgence of COVID-19, will be promoted after comprehensive review in close consultation with health authorities."

He added, "The Korea Sale Festa (Kosepe) will be held from November 1 to 15, and consumption events for small and medium enterprises and traditional markets during Christmas, as well as domestic demand revitalization packages across sectors including dining, tourism, and culture, will be promoted."

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