Experts Propose Structural Reforms to Address Korea Discount, Including Minority Shareholder Protections

On July 3, experts at an Asian Financial Association International Academic Conference in Seoul proposed fundamental reforms to address Korea Discount—the chronic undervaluation of Korean equities in capital markets. Speakers identified cross-listings among the major impediments to corporate governance and investor protection.

Experts recommended introducing minority shareholder majority voting (MoM) for related-party transactions and mandatory tender offer requirements to prevent controlling shareholders from exploiting their position. The MoM system would exclude votes from controlling shareholders and related parties in matters such as mergers or stock exchanges, ensuring broader shareholder protection. Participants also emphasized the need for government incentives and penalties to resolve existing cross-listings, noting that similar structural reforms in Japan had successfully improved market efficiency and corporate accountability.