Lee Jun-seok's Reform New Party "Ban on Split IPOs and Mandatory Treasury Stock Cancellation"

Announcement of 8 Advanced Capital Market Policies
Promotion of KOSPI 5000 and KOSDAQ 2000 Era

The provisional Reform New Party, led by former leader Lee Jun-seok, announced its third party platform policy, unveiling eight capital market advancement policy pledges, including legislation to protect minority shareholders.

On the 15th, Kim Yong-nam, Strategic Planning Committee Chair of the Reform New Party, criticized at the National Assembly Communication Office, "The 'Korea Discount,' an undervaluation phenomenon of Korean stocks, is not due to the geopolitical risks of the Korean Peninsula but rather the flawed corporate governance that neglects and ignores minority shareholders excluding controlling shareholders."

Chairman Kim pledged, "Through reform legislation, the Reform New Party will open the era of a KOSPI index of 5000 and a KOSDAQ index of 2000 within the term of the 22nd National Assembly."

He stated, "Temporary measures such as the short-selling ban currently implemented by the government to stimulate the stock market are hasty policies that show a very low understanding of the capital market and cannot create a long-term upward-trending stock market," adding, "If we use the price-to-book ratio (PBR) level of U.S. companies like Apple or Nvidia as a standard, Samsung Electronics, the so-called 'national stock' invested in by about 6 million domestic investors, should be priced at around 2 million KRW per share, not the current '70,000 Electronics'."

Reform New Party Announces Capital Market Advancement Policy Pledge
(Seoul=Yonhap News) Reporter Han Jong-chan = Kim Yong-nam, Strategic Planning Chairman of the Reform New Party, is announcing the capital market advancement policy pledge at the National Assembly Communication Office on the morning of the 15th. 2024.1.15
saba@yna.co.kr
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He then presented eight legislative tasks: △ amending the Commercial Act to include directors' duty of loyalty to all shareholders △ mandating 100% public tender offers when acquiring management rights △ banning split listings through physical division △ mandating treasury stock cancellation △ introducing electronic voting and electronic proxy systems for listed companies △ reforming the class action system △ introducing the discovery procedure △ and establishing a governance improvement body within the National Assembly.

As a mid- to long-term task, he explained plans to reform systems related to corporate bonds, such as convertible bonds (CB) and bonds with warrants (BW). Chairman Kim said, "It is necessary to prevent cases where controlling shareholders obtain unfair profits or effectively seize management rights with little capital through abuse," adding, "We will reform the distorted holding company system and consider lowering inheritance tax rates."

Chairman Kim added, "The goal of the Reform New Party’s capital market advancement policy is to create a long-term upward-trending Korean stock market through sufficient shareholder protection at the level of the U.S. capital market."