Lee Jae-myung, a candidate for the Democratic Party of Korea's presidential primary, said on the 25th, "If [I am elected president] and gain authority, I will amend the Company Law as quickly as possible." Kim Dong-yeon also noted, "In addition to the 'duty of directors to be faithful to shareholders' and 'mandatory electronic shareholders meetings,' a mandatory share buyback is also necessary." This is to introduce strong shareholder return measures to address the Korea discount (the undervaluation of the domestic stock market).
The candidate stated at a televised debate on the 21st presidential primary organized by TV Chosun, "The People Power Party claimed that the Company Law needs to be amended, yet when it comes to actually amending it, they reverted to an opposing stance," adding, "They even advised exercising the right to demand reconsideration (veto power) on the Company Law amendment passed by the plenary session, leading to the eventual veto being exercised."
He mentioned, "The South Korean stock market is undervalued, and if the price-earnings ratio (PER) reaches only the level of a developing or underdeveloped country, stock prices could nearly double," adding, "To first normalize the stock market, we must ensure that there are no unfair and opaque abnormal transactions such as stock manipulation or violations of disclosure regulations." He further stated, "It is important to prevent the abuse of management control by dominant shareholders, so-called major shareholders."
The candidate then asked Kim, "Regarding the amendment of the Company Law, I viewed your statement that 'you should implement a pinpoint amendment.' Why must only the Capital Markets Act be amended?"
In response, Kim replied, "I think you are mistaken," stating, "I have agreed to the amendment of the Company Law and have advocated for the duty of fidelity to shareholders and the introduction of electronic shareholders meetings, along with the mandatory share buyback." He added, "It will be difficult to adequately address this issue through the (People Power Party's proposed) amendment of the Capital Markets Act, which only targets listed companies."
Earlier, the policy materials published by Kim on the 17th included provisions for a 'protection law for retail shareholders,' which encompasses ▲prohibition of split listings ▲mandatory share buybacks ▲reflection of fair value in mergers ▲granting share buyback rights to shareholders opposing physical partitioning.
On the 21st, the candidate also visited the Korea Financial Investment Association and stated that he would promote amendments to the Company Law that include, among others, expanding the 'duty of fidelity to shareholders' and 'introduction of electronic shareholders meetings,' as well as the separate election of audit committee members and expansion of the cumulative voting system. He also mentioned a plan to change the law to ensure that shares bought back by listed companies are generally subject to mandatory buyback. Through this, he aims to create a 'KOSPI 5000 era.'