Jeong Eun-bo, Financial Supervisory Service Chief, "Reviewing Improvement of Physical Division System with Financial Services Commission"

Jeong Eun-bo, Governor of the Financial Supervisory Service, is greeting attendees at the private equity fund (PEF) managers' meeting for institutions held at the Kensington Hotel in Yeouido, Seoul, on the 9th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Lee Jung-yoon] Jeong Eun-bo, Governor of the Financial Supervisory Service, stated on the 9th that they are considering improvements to the physical division system in response to recent backlash from small shareholders regarding 'split listings.'

Governor Jeong said in a meeting with reporters after an institutional private equity fund industry roundtable held at the Kensington Hotel in Yeouido, Seoul, "I think there could be two issues related to re-listing after a physical division," adding, "The issue of protecting small investors can be addressed not only by the Capital Markets Act but also by the Commercial Act, so the Financial Supervisory Service is also reviewing system improvements."

He continued, "If the Commercial Act also needs to be reviewed, we must consult with the relevant government departments in charge," and explained, "We are currently reviewing the protection of small investors together with the Financial Services Commission."

LG Chem faced criticism over the devaluation of small shareholders' equity after physically splitting and listing LG Energy Solution. Kakao also split and listed Kakao Bank and Kakao Pay separately. CJ ENM announced plans last November to establish a new company through a physical division of its content business division but temporarily suspended the plan due to opposition from small shareholders.

Governor Jeong also explained that they are reviewing issues related to 'inflated subscriptions' by institutional investors during initial public offerings (IPOs).

He said, "Regarding demand forecasting during IPOs, we are closely consulting and reviewing the role of institutional investors, which has been pointed out by the media, with the Financial Services Commission," adding, "It does not seem appropriate to mention specific details yet." Previously, during the institutional demand forecast for LG Energy Solution conducted last month, there was criticism of phantom subscriptions as orders worth 1,000 trillion won flooded in.

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