Eleven ruling party lawmakers, including Oh Gi Hyoung of the Democratic Party, put forward amendments to the Capital Market Act, which sets the rules for mergers and acquisitions involving listed companies. Oh, who leads a special parliamentary committee focused on the so-called Korea discount, detailed the plan in a Thursday statement from his office.
If adopted, boards at companies facing a takeover offer would have to publish an independent assessment of the bid. That opinion must state whether the deal is in the interests of all shareholders.
Today, mandatory disclosures largely center on moves tied to a company's assets or who manages it. The proposal would extend that requirement to corporate decisions that materially affect shareholders. With that adjustment, takeover-related plans affecting shareholders would be subject to mandatory disclosure as well.
Officials aim to tackle the Korea discount - the persistent undervaluation of South Korean equities relative to global markets - often blamed on governance shortcomings and the dominance of family-controlled conglomerates. Despite the Kospi rising more than 50% this year, it remains priced below markets such as Taiwan and Japan.
This push fits into a wider overhaul of corporate governance under President Lee Jae Myung. Last year, lawmakers approved a landmark overhaul that broadened directors' fiduciary duties, obliging them to safeguard the interests of all shareholders and to ensure fair treatment. Oh said South Korea's M&A market has not effectively unlocked value in undervalued firms, which the proposal aims to address. As he put it, "The proposed revision is expected to contribute to protecting investors and resolving the Korea discount by strengthening the board's responsibility and enhancing information transparency in an M&A process."
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This is a transparency play aimed at investor protection and closing the valuation gap. If you follow Korean equities, the direction of travel is clear: policymakers are prioritizing governance and information quality around deals that affect shareholders. That focus, along with last year's expansion of directors' duties, is the backdrop to watch as you assess how companies handle bids, board decisions, and shareholder treatment.
