South Korea: Shareholder Activism

This country-specific Q&A provides an overview of Shareholder Activism laws and regulations applicable in South Korea.

  1. What are the principal sources of laws and regulations relating to shareholder rights and activism? Do insider trading and/or market abuse rules apply to activist activity?

  2. How is shareholder activism viewed in your jurisdiction by regulators, shareholders (both institutional and retail) and the media?

  3. How common are activist campaigns and what forms do they take? Is activism more prevalent in certain industries? If so why?

  4. How common is it for shareholders to bring litigation against a company and/or its directors and what form does this take?

  5. What rights do shareholders/activists have to access the register of members?

  6. What rights do shareholders have to requisition a shareholder meeting and to table a resolution at the meeting?

  7. Where a shareholder requisitions a meeting, who is responsible for the costs of calling and holding the meeting?

  8. Are there any rights to circulate statements to shareholders?

  9. Who is entitled to attend and speak at a shareholders’ meeting?

  10. What percentage of share capital is needed to appoint or remove a director? What is the process?

  11. What percentage of share capital is needed to block a shareholder resolution?

  12. Do holders of other instruments (e.g. options, warrants, contracts for difference, swaps, cash-settled derivatives) have any of the above rights?

  13. Is stamp duty payable on share acquisitions? Can this be avoided/mitigated (e.g. through use of derivatives)?

  14. To what level can you acquire shares without having to publicly (or privately) disclose your position?

  15. Is the disclosure threshold different if the issuer is subject to a takeover offer?

  16. Are there any rules which restrict the speed at which you can build a position?

  17. Are there circumstances in which a mandatory takeover is required?

  18. Does collective shareholder action or ‘acting in concert’ have any consequences in your jurisdiction (e.g for disclosure purposes or the rules on mandatory offers)?

  19. Do the same rules and thresholds apply to other instruments (e.g. options, warrants, short positions, contracts for difference, swaps, cash-settled derivatives)?

  20. If an activist makes a takeover offer, what impact might any prior share purchases have on the minimum offer price or the form of consideration that must be offered?

  21. What measures are available to companies to protect against an activist campaign?

  22. What duties do directors owe to a company and its shareholders? Highlight any that are particularly relevant in the context of an activist campaign.

  23. What rights does a company have to require parties to disclose details of their interests (direct and indirect) in the company’s share capital?

  24. Are there restrictions on companies selectively disclosing inside information to activists?

  25. Are settlement agreements between a company and an activist permitted in your jurisdiction? How common is it for activist campaigns to be resolved in this way?