Contents
1 Directors’ duties and liabilities in Korean companies_ Hwa-Jin Kim and Sung-Joon Park
2 Shareholder suits against Korean directors_ Bernard S. Black, Brian R. Cheffins and Michael Klausner
3 New squeeze-out devices as a part of corporate law reform in Korea_ Hyeok-Joon Rho
4 Monitoring of corporate groups by independent directors _ A.C. Pritchard
5 Piercing of the corporate veil in Korea: case commentary_ Joseph Cho and Eun Young Shin
6 The range and scope of accounting books and records_Tony DongWook Kang
7 Review of Korean laws pertinent to Foreign Financial Institutions’ Korean business: with emphasis on a few issues that are frequently raised in practice_Hyunjoo Oh
8 Recent regulatory developments regarding ABS in Korea_Kyung Hwa Moon
9 Private equity in Korea: history, industry and policy_Hwa-Jin Kim abd Alice Z. Chen
10 The present and future of private equity funds(PEF) in Korea_Hee Jeu Kang and Hyun Kim
11 The market for corporate control in Korea_Hwa-Jin Kim
12 Issuance of new shares as a takeover defense and countermeasures_Sang Gon Kim
Contributors
Bernard S. Black is the Nicholas D. Chabraja Professor at Northwestern University School of Law and Professor of Finance at Kellogg School of Management. He received a B.A. from Princeton University, an M.A. in Physics from the University of California, Berkeley, and a J.D. from Stanford Law School. He was Professor of Law at Stanford Law School from 1998 to 2004.
Brian R. Cheffins is the S.J. Berwin Professor of Corporate Law at University of Cambridge Faculty of Law. He received B.A. in History and LL.B. degrees from University of Victoria, British Columbia, Canada, and an LL.M. from Cambridge University. Professor Cheffins also taught at Harvard and Stanford Law Schools.
Alice Z. Chen is an incoming associate at Davis Polk & Wardwell LLP. She received her J.D. cum laude from the University of Michigan Law School, and her B.A. cum laude from Columbia University. Joseph Cho is General Counsel at Samsung Thales Co., Ltd. He received a B.A. from the University of Toronto, a J.D. from Osgoode Hall
Law School of York University, and an LL.M. from the University of London.
Hee Jeu Kang is a partner in the Capital Markets Practice Group of Lee & Ko. He primarily practices in the areas of private equity and venture capital funds, M&As and securities. He received his LL.B. from Yonsei University, Master’s degree in Law from Seoul National University, and LL.M. from Santa Clara University Law School.
Tony DongWook Kang is a partner of Bae, Kim & Lee, LLC and deals with international litigation and control disputes, including hostile take-overs and M&As. Mr Kang served as a judge for the Korean judiciary for twelve years before he joined his law firm. He received his LL.M. from Harvard Law School, and LL.B. cum laude from Seoul National University.
Hwa-Jin Kim is a Professor of Law at Seoul National University School of Law. He also has taught at Stanford, Michigan, and Tel Aviv Law Schools. He received his Dr. Jur. magna cum laude from University of Munich, where he was an Adenauer Scholar, and an LL.M. from Harvard Law School.
Hyun Kim is an associate in the Capital Markets Practice Group of Lee & Ko. He primarily practices in the areas of private equity and venture capital funds, M&As and securities. He received his B.A. in Economics from Seoul National University.
Sang Gon Kim is a partner at Lee & Ko. He has concentrated on general corporate and business laws, focusing on mergers and acquisitions. He has worked on a wide variety of merger and acquisition transactions. He received his LL.M degree in 2001 from University of Minnesota Law School and received his LL.B degree from the Seoul National University in 1992.
Michael Klausner is the Nancy and Charles Munger Professor of Business and Professor of Law at Stanford Law School. Before joining the Stanford Law School faculty in 1997, he was a professor of law at New York University School of Law. Professor Klausner received a B.A. from University of Pennsylvania and an M.A. in Economics and a J.D. from Yale University.
Kyung Hwa Moon is a partner at Shin & Kim. Her main area of practice is structured financing including asset-backed securitization, banking, and project financing. She has participated in various domestic and crossborder asset-backed securitization transactions in Korea. She received her LL.B. from Seoul National University and an LL.M. from Stanford Law School.
Hyunjoo Oh is a partner in the Capital Markets Group at Lee & Ko. Her main area of practice is securities and derivative transactions, and regulatory compliance. She received her B.A. in International Relations from Seoul National University and LL.M. from Columbia Law School.
Sung-Joon Park is a partner at Shin & Kim. He received his LL.B. from Seoul National University, Master’s degree in Law from Korea University, and LL.M. from Columbia Law School. His areas of practice include corporate governance and M&A.
A.C. Pritchard is the Frances and George Skestos Professor of Law at the University of Michigan Law School. He received his J.D. from the University of Virginia and his M.P.P. from the University of Chicago.
Hyeok-Joon Rho is an Associate Professor at Seoul National University School of Law. He received his Ph.D. in law from Seoul National University. Before he joined the law faculty, he had worked as a senior associate lawyer of the Yulchon Law Firm and as a judge of the Seoul Southern District Court.
Eun Young Shin is a senior associate at Lee & Ko. She received an LL.B. and LL.M. from Seoul National University. Her areas of practice include corporate governance and M&A.
Preface
The Korean business and financial sectors continue to evolve rapidly in a dynamic and sophisticated way. Accordingly, the corresponding laws and regulations of such continue to adapt by promulgating new laws and creating precedents in an attempt to provide a fair and effective governance and market environment.
This book describes corporate and financial laws of Korea and analyzes current issues from academic and practical perspectives, providing a unique tool for understanding law, business and finance in Korea. The book provides commentaries from the most renowned scholars and professionals engaged in business and financial laws. The content of the book largely covers three major practice areas: corporate law, financial law, and mergers and acquisitions. Each area is covered thoroughly and provides a practical perspective in addition to political implications. The chapters explore such standard issues of Korean corporate law as director liability and minority shareholder protection from a comparative perspective, paying special attention to the dynamic practice area of mergers and acquisitions. They also cover the cutting-edge topics of Korean financial law, including private equity, structured finance and foreign financial institutions. Finally, the book provides a grand picture of the Korean business and financial sector that allows readers to compare and understand Korea’s position in connection with the global advancement of business and financial law.
Some of the chapters of this book are shortened and updated versions of the articles previously appeared in the Journal of Korean Law. I thank the Journal for graciously giving its permission to reprint the articles. I also thank Heewon Ghim, Jung Kyu Wang and Seungwon Yoo for excellent assistance.
Hwa-Jin Kim
April 2012
General notice
Since its promulgation in 1962, Korean corporate law, which is a chapter of the Korean Commercial Code (KCC) has been developed under the influence of Continental European corporate law statutes, cases, and scholarly works. Until 1962, Korea used Japanese corporate law, which was a chapter of the Japanese Commercial Code (JCC). (Japanese corporate law was promulgated in 1899 adapting to the German corporate law and was completely revised after the Second World War in 1950 modeled after the U.S. Illinois Business Corporation Act of 1933.) However, Korean corporate law is undergoing significant changes, strongly influenced by that of the United States since 1997. The KCC (which is within the domain of the Korean Ministry of Justice) has been generally revised in 1984,1995,1998,1999,2001, 2009 and 2011. The recent general revision in 2011 will greatly modify Korean corporate law, and it is scheduled to be enforced on April 15, 2012.
Practically, the more important source of Korean corporate law used to be the Korean Securities and Exchange Act (KSEA), which was within the domain of the Korean Ministry of Finance and Economy. The KSEA was promulgated in 1962 and has been revised numerous times especially after 1997. However, the KSEA was repealed and partially replaced by the KCC and the Korean Financial Investment Services and Capital Markets Act (KCMA) on February 4, 2009. The stock company in Korea can exist as a private or as a public company such as a “Korea Exchange-listed company” or “KOSDAQ-listed company.” In addition to the requirements of the KCC related to the corporate governance of private companies, public companies are also partially subject to provisions of the KCC and the KCMA which are generally not applicable to private companies. In Korea, certain companies engaged in a specialized business (such as banking, securities, or insurance) will be subject to additional regulations and requirements in terms of corporate governance under the relevant laws, i.e., the Korean Banking Act, etc. Directors of financial institutions may be subject to a stricter liability regime.
Disclaimer: No part of this book should be construed as legal advice or opinion of the professional organizations with which some contributors to this book work. The contributors, editor and publisher are not responsible for any action taken by the reader on the basis of this book.