[Q&A] Lee Bok-hyun: "We will steadily promote value-up... Will listen to investors' opinions on abolishing the financial investment tax"

Attendance at the 40th Meeting of the Korea Chamber of Commerce and Industry Financial Industry Committee
"Value-up is a policy that provides incentives," emphasized
No penalty for companies unable to return shareholder value
Meaningful exit of companies negative to the vitality of the Korean stock market
"Saemaeul Geumgo must take responsibility if there are issues with working loans"

Lee Bok-hyun, Governor of the Financial Supervisory Service, is entering the conference room to give a lecture at the Financial Industry Committee meeting of the Korea Chamber of Commerce and Industry held on the 15th at the Westin Chosun Hotel in Seoul. Photo by Heo Young-han younghan@

Lee Bok-hyun, Governor of the Financial Supervisory Service, emphasized on the 15th, "We will steadily and consistently promote the corporate value-up program to secure long-term growth capabilities." Amid concerns that the ruling party may lose momentum for policy implementation following a significant defeat in the general election, he reiterated the commitment to policies aimed at revitalizing the capital market and maintaining policy consistency.

After attending the '40th Korea Chamber of Commerce and Industry Financial Industry Committee Plenary Meeting' held at the Westin Chosun Hotel in Jung-gu, Seoul, Governor Lee stated, "We are in a macroeconomic environment where it is difficult to stimulate demand and boost the real estate market to contribute to growth rates and asset formation."

Governor Lee responded to questions regarding the corporate value-up program, financial investment income tax (Geumtu Tax), Saemaeul Geumgo working loan inspections, and his business trip to New York in May. The following is a Q&A with Governor Lee.

- The opposition party is reluctant to abolish the financial investment income tax. What is your opinion on this?

▲ Since there is a tax authority, I am not in a position to speak unilaterally, but unlike when the financial investment income tax was first discussed, there are now various opinions. We can ask capital market participants, including individual investors, whether it helps the overall productivity of the capital market and the healthy trend formation of the KOSPI stock price. We are preparing an additional meeting with individual investors at the end of April regarding short selling and the corporate value-up program.

- Regarding the corporate value-up program, tax support requires cooperation from the opposition party. What are the related measures concerning corporate tax and dividend income tax?

▲ The corporate value-up program and capital market revitalization policies cannot be achieved by tax measures alone. However, I believe it is necessary to publicize what form of taxation on dividends or income acquired in the capital market is fair. For example, taxation on companies sometimes occurs at multiple stages of added value. It needs to be considered from the perspective of fairness. One thing is certain: in the long term, incentives of some form must be given to those who invest steadily in the capital market.

Financial Supervisory Service Governor Lee Bok-hyun attended the Korea Chamber of Commerce and Industry Financial Industry Committee meeting held at the Westin Chosun Hotel in Seoul on the 15th and gave a lecture on the theme of "The Great Transformation of the Capital Market and Steps Toward the Leap of Our Companies and Capital Market." Governor Lee is seen walking to his seat after taking a commemorative photo with the attending committee members before the event. To Governor Lee's left is Choi Hyun-man, Chairman of the Korea Chamber of Commerce and Industry Financial Industry Committee and Advisor at Mirae Asset Securities. Photo by Heo Young-han younghan@

- How is the progress of the investment briefing session scheduled in New York, USA, in May?

▲ Formally, it will be held as a joint event between the Korea Exchange and the Financial Supervisory Service. We plan to coordinate the content with higher authorities such as the Financial Services Commission. Now, it is also necessary to participate as lending and borrowing institutions in countries with higher growth engines, i.e., outgoing (overseas expansion). However, both the public and private sectors believe that establishing a presence in advanced markets such as New York, London, Singapore, and Hong Kong enhances the completeness of global portfolio management. We plan to explain foreign exchange systems, shareholder protection, and financial companies' dividend policies to overseas investors.

- Is your stance on Yang Moon-seok, the elected member of the Democratic Party of Korea (Gyeonggi Ansan Gap), unchanged? Please also explain any additional progress on related matters.

▲ Everyone seeks residential stability in the real estate market and wants to improve the living environment through economically bearable burdens in this process. Such market economy efforts should be respected. However, real estate regulatory policies over the past few years have been implemented to a degree equivalent to infringing property rights. Acquiring assets illegally by circumventing or overcoming these regulations to gain upside must be held accountable regardless of status. Conversely, if financial companies deviate from policy trends and seek immediate profits improperly, they must be held responsible. This is consistent with managing the increase in household loans and is viewed as a market management issue rather than a political one.

- In February, you mentioned delisting companies that fail to properly return profits to shareholders. Could you elaborate?

▲ The corporate value-up program is a policy that rewards companies that perform well. It is undesirable to delist companies that cannot implement shareholder return policies within one or two years due to corporate circumstances after the program's implementation. That would lack policy consistency. For some companies involved in unfair trading causing sharp stock price fluctuations and harming minority shareholders, is it appropriate to maintain their listing? Companies that undermine market vitality should be removed to some extent. This is the context of discussions with the Financial Services Commission and the Korea Exchange. Please do not interpret this as a penalty against companies that do not establish shareholder-friendly policies.

- Concerns about savings bank restructuring are growing due to real estate project financing (PF) insolvency. What is the current status and response?

▲ We plan to soon gather opinions on business feasibility evaluations from the industry. The basic principle is that it is appropriate for ownership to change for real estate or bridge loans that are not profitable. There are also projects that have progressed considerably or have business feasibility if efforts are made together. We will respond with a two-track approach, including temporarily providing incentives to related financial companies to facilitate smooth real estate supply.