Korean parliamentarians seek M&A reforms to protect minority shareholders ' rights

The proposal by members of the Korean ruling party to expand the disclosure requirements for business acquisitions is the latest initiative in Korea to strengthen the protection of small and medium-sized shareholders and to address the issue of discounts that have long plagued the country ' s stock market. Eleven Members of Parliament, Oh Gi Hyoung and others of the Co-Democrat Party, introduced a bill to amend the Capital Market Act to adjust the merger rules for listed companies. In his statement on Thursday, his office had indicated that the relevant amendments had been formally introduced. According to the statement, the amendment would require the board of directors of the acquired company to publicly disclose an independent opinion on the offer, including whether the offer is in the interest of all shareholders. The amendments will also expand the scope of mandatory information disclosure from what currently affects only the assets or management of the company to business decisions that have a significant impact on the interests of shareholders. Under this change, any M&A programme that may affect the interests of shareholders will also be subject to mandatory disclosure provisions. Kim Xian