In Korea, legislation has been pending for several years
It is evaluated that the Korean stock market has lost the opportunity to grow when Coupang, which has a corporate value of about 55 trillion won, decided to go public in the US. Although demands for the introduction of differential voting rights have been constantly raised around the business world, it is pointed out that concentrating only on “beating companies” is ultimately holding back the growth of startups.
According to the financial sector on the 15th, demands from the economic world to introduce differential voting rights have been frustrated every time. Differential voting rights are a system that gives more voting rights to stocks held by people who have contributed to the company, such as founders and managers, than ordinary stocks. It is one of the main defenses for hostile M&A.
Currently, the National Assembly is deliberating amendments to the relevant commercial law, and in November of last year, the first subcommittee on the Legislative and Judicial Commission said, “When the differential voting rights are allowed, it can act as a part that is exploited to succeed and inherit the management rights of several conglomerates or some companies.” There were not a few opposing opinions. At the time, Vice Minister of Justice Koki-young said, “The introduction of differential voting stocks allowed exceptions to the one-week, one-voting principle and could lead to a problem of distorting the governance structure. The problem is that, in the case of startups that must continue to grow by attracting external capital, this process has a side effect of diluting the founder’s voting rights. If the founder’s voting rights are shaken, it is difficult to stabilize management. Because of this, unicorn companies have recently emerged as a major trend in foreign countries as they prefer IPOs with differential voting rights. In the US, differentiated voting rights are given to platform companies that have emerged as new growth industries such as Google and Alibaba. The Korean government is pursuing a plan to introduce differential voting rights only to venture companies by revising the Venture Business Act.
Reporter Min Jung-hye [email protected]