Retiring Treasury Stock Is Made Easier

A number of domestic companies listed on local equity markets are expected to retire stock held in their treasuries to boost their share prices, after the financial authorities revised the securities-trading law to allow firms to do so just by getting the board's decision.

According to the Financial Supervisory Service on Thursday, 104 corporations listed on the Korea Stock Exchange and 152 on the Kosdaq market have added a clause to their articles of incorporation allowing them to retire their own shares. The decisions were made at their annual shareholders meetings. The companies include Samsung Electronics Co., Pohang Iron & Steel Co., SK Telecom Co., Hyundai Engineering & Construction, CheilJedang and Samsung Corp.

The firms will now be able to retire treasury stocks that were bought back from the market either at six months or more before a retirement decision was made or after the board approved it, without having to get the shareholders' nod. Under the previous law, a company had to purchase its own shares from the market with a view to invalidating them, before obtaining shareholders' consent and going through procedures for protecting creditors.

by Chung Sun-gu