Business law revision hurts firms fighting hostile funds
Posted : 2020-12-22 13:52
By Nam Hyun-woo
A revision to the country s Commercial Act is raising fears that it may end up preventing local firms from defending their management rights against hostile investors, according to industry officials and experts.
They cited a U.S. private investment fund s recent opposition to LG Group s plan to spin off some units as a case that may have become worse since the revision, and many Korean firms having activist funds as shareholders will face similar opposition to their decision-making procedures.
On Dec. 9, the National Assembly passed a number of revisions to the act, aimed at requiring companies to appoint more than one audit committee member from outside the board of directors, decided upon by shareholders. In this process, the respective voting rights of a company s owner and their affiliated persons and organizations ― the largest shareholders ― will be limited to 3 perce
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Local brokerages cast high hopes for LG spinoffs
Posted : 2020-12-21 16:31
By Nam Hyun-woo
Domestic brokerages are anticipating a positive impact after LG Group s planned spinoff of five companies under its wing, saying the changes will spur each firm to put greater efforts into improving their value.
U.S. hedge fund operator Whitebox Advisors earlier threatened legal action as part of its opposition to the plan on fears of discounts to the value of LG Corp., the remaining holding firm of LG Group after the spinoff. The spinoff of the companies will have limited impact on LG Corp. s value, because existing shareholders of LG Corp. will own both companies shares, while the stock splitting ratio of LG Corp. and the new holding firm of the spinoffs is limited to 0.911 : 0.089, SK Securities analyst Choi Kwan-soon said, Monday.
[EXCLUSIVE] Whitebox considers lawsuit against LG
Posted : 2020-12-17 16:37
US hedge fund considers all options to prevent spin-off
By Park Jae-hyuk
Whitebox Advisors, a U.S.-based activist hedge fund manager that has demanded LG Group stop its planned spin-off of affiliates, is considering taking legal action against the Korean conglomerate over its refusal to honor the request, a source familiar with the matter told The Korea Times, Thursday. Whitebox is currently considering all legal and other options, the foreign source said on condition of anonymity.
Earlier this week, Whitebox head of equity Simon Waxley sent a letter to the board of directors of LG Corp., the group s holding company, to call for the suspension of their plan to spin off a newly created holding company comprised of LG Hausys, LG MMA, Silicon Works, LG International and Pantos for LG Group Chairman Koo Kwang-mo s uncle, Koo Bon-joon, to develop his own business group.
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