"If the 3% rule is passed, major shareholders with 44% stakes cannot exercise voting rights"

[Asia Economy Reporter Changhwan Lee] If the introduction of the separate election system for audit committee members and the limitation of the largest shareholder's voting rights to 3% (3% rule), which are part of the Commercial Act amendment bill promoted by the government and the ruling party, are implemented, 43.8% of the voting rights of the largest shareholders in large corporations will be unable to be exercised.

On the 4th, CEO Score, a corporate evaluation site, investigated the stock ownership status of the largest shareholders and related parties of 211 affiliates in 55 groups designated as large business groups by the Fair Trade Commission, which have audit committees installed among listed affiliates. Their average shareholding was calculated to be 46.8%.

CEO Score stated that if the 3% rule regulation, including the separate election system for audit committee members promoted by the government and ruling party, is implemented, 43.8% of the 46.8% shares held by the largest shareholders will have restricted voting rights.

The company with the largest restricted shares due to the legal amendment was Taekwang, where an average of 72% of the voting rights corresponding to its shareholding were restricted during the audit committee member appointment process. This was followed by Kyobo Life Insurance with 71.4%, Korea Technology Group (61.5%), S-Oil (60.4%), and Hite Jinro (60.3%).

There were also 12 companies where the restricted shares exceeded 50%, including Young Poong (59.2%), Aekyung (58.7%), Lotte (57.8%), AmorePacific (55.4%), Samyang (55.3%), Harim (55.1%), SM (54.4%), and LS (53.5%). Samsung and Hyundai Motor Group also had restricted shares amounting to 34.0% and 38.5%, respectively.

CEO Score explained, "In fact, most listed companies in large business groups will face significant restrictions in appointing audit committee members," adding, "The regulation on appointing audit committee members could become a channel for foreign capital such as foreign speculative funds to intervene in management, posing a threat to corporate activities."

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