"Enhancing Corporate Competitiveness Through Business Restructuring is a Key to Shareholder Protection"

Amid the rapidly changing global economic environment, including the intensification of the US-China tariff war, the need for business restructuring in major industries such as petrochemicals is growing, prompting the business community to seek ways to promote business restructuring and protect shareholder rights.

The Korea Chamber of Commerce and Industry held an expert roundtable discussion on "The Era of Business Restructuring, Corporate Competitiveness, and Shareholder Rights Protection" on the afternoon of the 14th at the Chamber of Commerce building. Professor Choi Seung-jae of Sejong University, who attended the roundtable, is delivering a presentation. Photo by Korea Chamber of Commerce and Industry

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On the 14th, the Korea Chamber of Commerce and Industry (KCCI) announced that it held an expert roundtable titled "The Era of Business Restructuring: Corporate Competitiveness and Shareholder Rights Protection" at the KCCI headquarters in Jung-gu, Seoul.

Experts at the roundtable predicted that supporting companies' free business restructuring to promote innovative growth and secure fundamental corporate competitiveness would be the key to value-up. They also pointed out the need to improve investors' investment practices and culture, such as encouraging a long-term investment culture.

Professor Choi Seung-jae of Sejong University, who presented on "Corporate Restructuring and Shareholder Protection Measures," stated, "Proactive business restructuring has become an essential condition for corporate survival," adding, "Although there are various methods of business restructuring and financing under current law, evaluating these mainly from the perspective of 'short-term stock price impact' is like telling a runner not to move their legs while running."

He continued, "The Commercial Act aims to reduce transaction costs and ensure transaction safety, and shareholder protection is one of several ways to enhance corporate competitiveness, not a panacea for regulation," emphasizing, "The board of directors should reasonably decide on financing methods from the perspective of corporate competitiveness under the duty of care prescribed by current law and continuously communicate the results with shareholders."

In the subsequent discussion, Professor Kwon Yong-soo of Konkuk University said, "While shareholder returns may help enhance corporate value for some companies, others urgently need mid- to long-term investments," introducing, "In Japan, discussions are underway to support corporate mid- to long-term innovation by, for example, strengthening shareholder proposal requirements and identifying foreign institutional investors to prepare against management takeovers."

Professor Emeritus Choi Jun-seon of Sungkyunkwan University argued, "There are various shareholder protection measures under current law, and supplementary measures such as improving merger price calculation standards under the Capital Markets Act are continuously being pursued," adding, "Rather than additional corporate regulations, it is necessary to consider incentives from the investor side, such as dividend income tax reductions or capital gains tax reductions for long-term investors, preferred stock allocations, or additional dividend benefits."

Center Director Ahn Sang-hee of Daishin Economic Research Institute also stated, "There is no theory that corporate value enhancement is the foundation of shareholder returns," and cautioned, "Since the governance structure of Korean companies is centered on controlling shareholders, unlike major countries, utmost caution is needed when promoting corporate value enhancement in a way that recognizes only general shareholders while excluding controlling shareholders."

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