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Large shareholders of non-banking financial companies to face restriction in voting rights...

Collected: 2016.03.19

Distributed: 2016.03.22

Source: Go Direct

Starting August, the largest shareholders of non-banking financial enterprises like securities, insurance, and credit card companies in South Korea won’t be able to exercise their voting rights beyond 10 percent for up to five years if they are slapped with a jail term for more than a year for violating financial or antitrust regulations.

The head of a conglomerate would subject to the regulation if an individual shareholder is not clear under cross-affiliate investment in a financial company, according to a new act to toughen regulations on governance in financial companies announced by the Financial Services Commission. The act goes into effect in August.

Following the corruption scandal of the group owner family members that led to the fall of the Tongyang Group in 2013, there had been calls for stronger eligibility regulation on large shareholders in non-banking financial companies.

By Chung Seok-woo

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