Kim So-Young: "Company Shares Should Not Be Misused as a Means for Major Shareholders' Private Gain"

Exemption from Mandatory Incineration... Considering Stock Options and Other Management Activities

Kim So-young, Vice Chairman of the Financial Services Commission. Photo by Yoon Dong-joo doso7@

Kim So-young, Vice Chairman of the Financial Services Commission, stated on the 30th, "Going forward, treasury stocks will no longer be misused as a means for major shareholders to illegitimately pursue private interests, but will be operated in accordance with the original purpose of the system, which is to enhance shareholder value."

Vice Chairman Kim attended the 'Listed Companies Treasury Stock System Improvement Meeting' held at the Gwanghwamun Government Seoul Office in the afternoon and said, "In Korea, there have been continuous voices that treasury stocks are abused as a means for major shareholders to expand their control or defend management rights."

He emphasized, "During the process of corporate spin-offs, the allocation of new shares to treasury stocks will be prohibited, and when a newly established company from a spin-off is re-listed, we will thoroughly check whether sufficient measures to protect the rights and interests of general shareholders have been prepared during the listing review process." This is an explanation that the so-called 'treasury stock magic,' where major shareholders illegitimately strengthened their control during corporate restructuring such as converting to holding companies, will be fundamentally improved.

Additionally, Vice Chairman Kim stated, "We will ensure that more transparent information is disclosed in the market throughout the entire process of acquiring, holding, and disposing of treasury stocks," and "If a company's treasury stock holding ratio increases beyond a certain level, detailed disclosure obligations regarding the reasons for holding treasury stocks will be imposed."

In this process, to enable market checks and monitoring functions on arbitrary disposal of treasury stocks, disclosure obligations regarding the purpose of disposal will be strengthened when disposing of treasury stocks.

The current system improvement plan excludes the content of 'mandatory treasury stock cancellation.' Vice Chairman Kim emphasized, "Considering the practical demand for various means used in corporate management activities, there are opinions that market autonomy should be balanced," and "We have prepared the plan by comprehensively considering opposing opinions."

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