Kosdaq Governance Laws Set

The National Assembly ratified revisions to securities laws Wednesday that will require outside directors to be seated on the boards of Kosdaq firms and provide safeguards against accounting fraud, the finance ministry said Wednesday.

The changes call for Kosdaq-registered companies that close their books in March and September to appoint nonstanding directors during their general shareholders meetings beginning April 1. Firms whose fiscal years end in December, because their shareholders meetings are in March, will wait until next year to appoint outside board members. In addition, the firm's major shareholders, regardless of stake size, will have their voting power capped at 3 percent during the election of the directors.

Accountants responsible for false audits of companies included in the Kosdaq or main exchange will face fines of up to 100 million won ($80,000), the ministry said. If accounting firms conduct external audits on companies for more than three years, it said, at least two-thirds of the staff for the job must be changed.