With the KOSPI index topping 6,000 for the first time ever, lawmakers on the Democratic Party of Korea's K-capital market special committee signaled that the next step would be strengthening the rights of small shareholders.
Democratic Party K-capital market special committee members Kim Nam-geun, Min Byung-deok, and Lee Kang-il of the Democratic Party of Korea appeared on the YouTube radio program "Kim Ou-joon's News Factory: Humility Is Hard" on the 25th to outline the third amendment to the Commercial Act centered on mandatory cancellation of treasury shares and the subsequent direction of capital market reform.
Min said, "People were thirsty for the advancement of the capital market. Once we reformed a market that felt like broad-daylight robbery, we reached the goal quickly." Showing confidence, Lee said, "The discount still hasn't been resolved. If we want to move to a premium from here, there's ample time left; it's not too late," adding, "I also put more into ETFs with my last remaining spare cash."
Ruling party lawmakers signaled stronger small shareholder rights through the "stewardship code." Kim said, "Small shareholders cannot freely make proposals at general meetings. We need to make it so that shareholders' intentions are accepted, preventing the controlling shareholder from exercising unchecked power," adding, "If we gather small shareholders to reach 10%, we can file a request." Lee noted, "The convocation period for general meetings is short, and disclosures come in a rush, so things pass without time to review the content," pointing out, "Because it's hard to even know what the agenda items are, the system needs to be fixed."
Shin Jang-sik of the Rebuilding Korea Party, who also appeared on the program, said, "It's about steadily enhancing the rights of retail investors to level the tilted playing field," adding, "How to strengthen the rights of small shareholders is the direction of the Commercial Act amendment."
The third amendment to the Commercial Act being pushed by the Democratic Party is expected to pass the National Assembly's plenary session in the afternoon. The third amendment mandates that corporations cancel treasury shares within one year when they acquire them, and grants a six-month grace period after the law takes effect for treasury shares already held, requiring cancellation within one year and six months.