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President Lee Jae Myung speaks about revitalizing the capital market at a capital market policy meeting in Yeouido, Seoul, on Nov. 13. /Yonhap News Agency

President Lee Jae Myung on Nov. 13 called for a review of measures to delist publicly traded companies that are effectively run as monopolies due to excessive ownership concentration among major shareholders.

Speaking at a capital market policy meeting held at the Korea Exchange (KRX) in Yeouido, Seoul, that morning, Lee said, "Shouldn't we consider ways to remove companies from the market if major shareholders own more than half of their shares, making competition for management control virtually impossible, or if they are effectively run too much like privately owned companies?"

He also raised concerns about excessive ownership concentration, saying, "If a business owner holds more than 50% of the shares and less than 10% are available for trading on the market, shouldn't such a company be delisted?"

Lee stressed that "the purpose of the stock market is to allow many participants to trade and ensure that shares are fairly priced."

"These companies enjoy all the benefits of being listed while effectively maintaining exclusive control over their management. I think we should put a stop to that," he said.

Lee also called for a review of listing maintenance requirements, saying, "I would like you to consider examining ownership ratios as part of the requirements for maintaining a listing and excluding companies that fail to meet them."

In response, Financial Services Commission (FSC) Chairman Lee Eog-weon said, "There are share distribution requirements among the criteria for maintaining a listing. We will also look into whether there are any shortcomings or areas where the rules are not being effectively applied."

Lee also raised the need to promote hostile mergers and acquisitions (M&A).

"Hostile M&A is the most powerful mechanism for normalizing the market, but doesn't our country have a hostile attitude toward hostile M&A?" he said, pointing to negative perceptions of such transactions in South Korea.

"Because of that attitude, aren't the policies of our regulatory authorities also geared toward defending companies against hostile M&A?" Lee asked. He instructed officials to conduct a comprehensive review of the various mechanisms that may be obstructing hostile takeovers.

"Of course, excessive hostile M&A activity would not be desirable, but there is far too little of it in our country. I hope we can discuss specific measures and find ways to encourage it," he added.

                                                                                                         Park Young-hoon