On the 22nd, it was learned that the Korea Fair Trade Commission is pushing a plan that would require holding companies to mandatorily retain at least 50% equity in a subsidiary even when the subsidiary is listed overseas in duplicate listings. Duplicate listings are a method in which a holding company is listed, yet it lists a highly profitable subsidiary. In that case, the holding company's share price can fall, and the intent of the plan is to reduce the incentive for duplicate listings by having the holding company hold as much equity in the subsidiary as possible.
Currently, a holding company only needs to hold 30% equity in a listed subsidiary. The Korea Fair Trade Commission (FTC) is pursuing a plan to raise this ratio to 50%. If this 50% standard is applied only to domestic listings of subsidiaries, companies can evade regulation through overseas listings. Accordingly, the Korea Fair Trade Commission (FTC) intends to revise the Monopoly Regulation and Fair Trade Act so that holding companies are required to hold at least 50% equity in a subsidiary not only when listing the subsidiary domestically but also when listing it overseas.
In Mar., the Financial Services Commission and the Korea Exchange (KRX) announced a plan to in principle ban duplicate listings. While saying they would in principle ban duplicate listings, they said they would tighten KOSPI and KOSDAQ listing reviews, but that does not block listings on overseas markets via foreign exchanges. The Korea Fair Trade Commission (FTC) plans to unveil a draft amendment to the Monopoly Regulation and Fair Trade Act within the first half of the year to fill this gap.
An official at the Korea Fair Trade Commission (FTC) said, "(The Financial Services Commission (FSC) and exchange system) does not block overseas listings," and noted, "What (the Korea Fair Trade Commission (FTC)) is reviewing regarding duplicate listings under a holding company structure is also related to overseas listings."