Support for Shareholders' Voting Rights Exercise and Company’s General Meeting Operation in Collaboration with Kakao Pay
[Asia Economy Reporter Lee Seon-ae] Korea Securities Depository (KSD) will officially launch an electronic shareholder meeting information notification service through KakaoPay starting from the 9th, providing individual shareholders with shareholder meeting information on their smartphones. After identity verification and consent to receive information, shareholders can check shareholder meeting schedules, agendas, electronic voting methods, and other shareholder meeting information anytime and anywhere on their smartphones. They can conveniently exercise their voting rights by moving to the electronic voting site included in the shareholder meeting information. Issuing companies are expected to find it easier to secure the quorum required for resolutions on shareholder meeting agendas, and the service is anticipated to be used as an effective communication tool with shareholders.
KSD plans to use KakaoPay’s platform to provide shareholders with shareholder meeting schedules, agendas, electronic voting methods, and more. Shareholders can conveniently exercise their voting rights by moving to the electronic voting site included in the provided shareholder meeting information. To use the service, shareholders must go through procedures such as identity verification and consent to receive information.
The mobile electronic notification service is an information notification method that replaces traditional postal notifications by sending notifications via mobile messengers or text messages (MMS). Currently, many institutions such as the National Tax Service, Military Manpower Administration, Seoul Metropolitan Government, National Pension Service, and Korea Expressway Corporation operate similar services.
Before introducing this service, KSD conducted a pilot operation last year, providing 1.17 million shareholder meeting information notices to individual shareholders of 108 companies. Based on the results of the operation, this year, a refusal-to-receive system and a one-stop electronic voting service have been additionally implemented.
This service is expected to help not only shareholders but also the smooth operation of shareholder meetings for listed companies. Since the abolition of the shadow voting system at the end of 2017, listed companies have faced difficulties in securing the quorum for resolutions. In fact, among listed companies with December fiscal year-ends, the number of companies whose agenda items were rejected at regular shareholder meetings increased from 76 in 2018 to 188 in 2019 and 340 in 2020.
Accordingly, KSD explained that the electronic notification service, which can quickly and accurately deliver the information necessary for exercising voting rights to shareholders without individual contact information, is expected to be used as an effective communication tool with shareholders.
Additionally, due to the cost burden of postal notifications, shareholder meeting notices for minority shareholders holding less than 1% of shares can be delivered via electronic disclosure, resulting in cost savings on postal expenses that previously occurred.
The electronic notification service application target includes all issuing companies that have electronically registered their shares. The usage fee for issuing companies for this service will be charged in connection with KakaoPay’s sending fees.
Shin Sung-chul, Head of the Voting Rights Planning Team at KSD, said, "This service, which includes information accessibility and convenience in exercising rights, will greatly assist shareholders in exercising their voting rights. As the prolonged COVID-19 pandemic is expected to continue causing difficulties in shareholder meeting operations for issuing companies, we expect this service to help secure the quorum."
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