Mergers to get more public, FSC says after Lee Jae-yong acquittal
![Financial Services Commission (FSC) Vice Chairman Kim So-young speaks in a meeting held to improve regulations on merger and acquisition deals in Yeouido, western Seoul, on Tuesday. [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2024/02/06/0b5da4eb-6ad5-4aa7-a381-93fd09d349b2.jpg)
Financial Services Commission (FSC) Vice Chairman Kim So-young speaks in a meeting held to improve regulations on merger and acquisition deals in Yeouido, western Seoul, on Tuesday. [NEWS1]
Korea will require companies to make public details of merger and acquisition (M&A) deals, including their timing, a move designed to increase scrutiny on board members and protect shareholders.
The Financial Services Commission (FSC) said Tuesday that it will require companies to publicly disclose the date its board decided to ink a merger or acquisition deal, as well as the board’s evaluation of the price.
The announcement came a day after the Seoul Central District Court acquitted Samsung Electronics Chairman Lee Jae-yong on charges of breach of trust and accounting fraud intended to push the merger of two Samsung affiliates.
“It’s difficult for ordinary shareholders to know about [managerial] biases by dominant shareholders behind M&A deals because the reasons and the process of the deals are not timely or sufficiently provided in the market,” FSC Vice Chairman Kim So-young said.
“Information on the decisions made by the board, which is the key to corporate governance, is also not sufficiently provided, raising concerns on making decisions that exclude the rights and interests of ordinary shareholders," Kim said.
The FSC will also bar businesses from having the same external agency propose and evaluate the price of an M&A deal.
Companies seeking to push M&A deals are currently required to hire an external agency to propose an appropriate price for a deal and evaluate the proposed deal. But businesses often hire the same agency to propose and evaluate the price, according to the FSC.
When a company merges with an affiliated firm, it will be required to appoint external agencies independent of its shareholders to study and evaluate the cost of the merger.
The FSC plans to issue a legislative notice of the proposed changes this month and enforce the revised regulations in March.
BY JIN MIN-JI [jin.minji@joongang.co.kr]
with the Korea JoongAng Daily
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