Kim Yong-min, chair of the Legislation and Judiciary Committee’s Bill Review Subcommittee No. 1, opens a meeting at the National Assembly in Seoul on Feb. 20 to review a proposed amendment to the Pardon Act. Photo by Yonhap News Agency
Feb. 20 (Asia Today) — A National Assembly subcommittee on Thursday approved a third revision to South Korea’s Commercial Act that would in principle require listed companies to cancel repurchased shares within a year, shifting key decisions from boards to shareholders.
The bill cleared the Legislation and Judiciary Committee’s Bill Review Subcommittee No. 1. It sets a one-year deadline for canceling newly acquired buyback shares and gives companies six months to comply for company-held shares already on their books.
Rep. Oh Ki-hyung of the Democratic Party told reporters the core change is requiring companies to decide their shares-held-in-treasury disposal plans at an annual shareholders meeting rather than leaving the matter to boards.
He said directors could face administrative fines of up to 50 million won ($34,500) if the company fails to cancel the shares within the required period.
Oh said the measure is not an unconditional mandate to cancel repurchased shares, arguing that companies could keep them for extended periods if they obtain approval from shareholders.
The revision also adds language allowing boards to pass resolutions on capital-reduction procedures when buyback shares acquired for specific purposes are canceled, lawmakers said.
— Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260220010006176