Lee Jae-myung, leader of the Democratic Party of Korea, said on the 31st regarding Prime Minister Han Duck-soo's hint at the exercise of veto power over the amendment to the Commercial Act, 'Will we still use the veto power when our capital market is boiling with distrust and frustration?'
On the same day, Lee noted on Facebook, 'Recently, the announcement of a 3.6 trillion won capital increase by a certain listed company caused the company's stock price to drop by 13% in just one day, resulting in significant losses for many retail investors.' He added, 'On the same day, the parent company's stock price also fell by over 12%,' and explained, 'However, today, news was reported that the head of the group would be gifting the equity of the company whose stock price decreased to his children.'
The case mentioned by Lee involves the management succession process of Hanwha Group. Hanwha Aerospace announced on the 20th that it would conduct a capital increase of 3.6 trillion won, the largest in the history of the domestic capital market, and subsequently, the stock price plummeted. Later, Chairman Kim completed the management succession by gifting half of his equity in Hanwha to his three sons on that day.
Lee pointed out, 'Stock prices affect gift tax, so there is a significant possibility of reducing gift tax with the lowered stock prices, and there are even speculations that the money paid as the price for the equity purchased from a company owned by children not long ago may serve as a source of gift tax.'
Lee added, 'This is not something that happens rarely in our capital market,' and noted, 'There is nothing to say in response to shareholders' criticism that they regard the capital market as an ATM.'