|
|
 Commercial
Code |
The purpose of the commercial code is to protect investors and increase transparency in corporate governance.
Under the
Commercial Code, minority shareholders need to hold
a minimum of: |
， 1 % of the
total outstanding shares to file a representative
suit
， 3 % to ask a court to dismiss its director
or auditor
， 3 % to access corporate financial documents
， 3 % to request a shareholder meeting be
convened
， 3 % to make a proposal at a shareholders
meeting |
| Securities
and Exchange Act |
|
The Act has eased the requirements for a listed company's minority shareholders to qualify for their rights: |
， Minimum 0.01%
of shares for more than six months entitles the
shareholder to file a representative suit;
， Minimum 0.5% (0.25 % for corporations having
capital over 100 billion won) for more than
six months
to ask a court for dismissal of director
or internal auditor;
， Minimum 0.05% to enforce a director to stop
illegal practices;
， Minimum 0.1% to access corporate financial
documents;
， Minimum 3% to call for a shareholders meeting
;
， Minimum 3% to ask the court for inspection
of corporate business and financial status;
， Minimum 1% to make a proposal at the shareholders
meeting;
， Minimum 1% to request a cumulative vote.
|
[Minority
Shareholder Rights]
| |
Commercial
Code |
Securities
and Exchange Act |
| To
file a representative suit |
1% |
0.01% |
| To
dismiss its director or auditor |
3% |
0.5%
(0.25) |
| To
dismiss its liquidator |
3% |
0.5%
(0.25) |
| To
stop its director's illegal practices |
3% |
0.05%
(0.025) |
| To
access corporate financial documents |
3% |
0.1%
(0.05) |
| To
request a shareholder meeting |
3% |
3%
(1.5) |
| To
request appointment of investigators
|
3% |
3%
(1.5) |
| To
make a proposal at shareholders meeting |
3% |
1%
(0.5) |
Note: Minimum % of shares required
for companies with capital of 100 billion
won or more--in brackets. |
| Securities
Related Class Action Act |
|
In December 2003, the Securities Related
Class Action Lawsuit Act was passed in the National Assembly. |
|
According to the Act, all listed firms with
assets of 2 trillion won or more, shall be
subject to the Act, starting 2005. |
|
This Act aims to give investors greater access
to legal redress if they have suffered damage from corporate
malpractices such as stock price manipulation,
insider trading, false disclosure (both primary
and secondary markets) and accounting frauds.
|
|
The Act permits a group of at least fifty
shareholders with combined shareholding exceeding
0.01 percent of outstanding shares to file
lawsuits against companies having a minimum
asset of 2 trillion won; companies with assets
below that minimum will be subject to class action suits starting 2007. |
|
|
|
|
