FSC aiming to protect investors with rule on merger talks

[YONHAP]

The financial regulator said Monday it will toughen public disclosure rules pertaining to merger deals in a move to better protect investors.

According to the Financial Services Commission (FSC), companies will be required to publicly disclose the details of discussions at board meetings related to merger deals.

The proposed revision will be put on public notice for the mandatory 40 days until April 15 and will be implemented in the third quarter of the year if enacted, the FSC said.

"Ordinary shareholders are unable to know the details of a merger since related discussions by the board of directors are currently not disclosed," it said in a press release.

"To address such a problem, the proposed revision requires public disclosure of the purpose and expected outcome, the price and the cost of a proposed merger, along with a statement of the board that includes reasons for opposition to the deal should there be any board member opposing the deal," it added.

Companies will also be required to hire different agencies to determine and evaluate the appropriate price of a merger as they are currently allowed to have the same agency determine the price and evaluate its own price at the same time.

It will stipulate specific rules for evaluating agencies, such as a conflict of interest, for the first time.

Yonhap