Kim & Chang’s Shareholder Activism Practice provides one-stop total solutions on all areas relevant to shareholder activism.

Lately, the number of new legislations and regulations aimed at enhancing transparency in corporate governance and strengthening shareholder rights in Korea has been rising.  In addition to these regulatory changes, shareholder activism, which seeks to actively pursue shareholder rights, is spreading, increasing the demand for improved corporate governance, business structure, financial structure, environment, and corporate social responsibility and shareholder return.

The ratio of institutional investors including domestic and overseas pension funds, financial institutions and funds, and foreign investors investing in Korean companies has increased while more and more institutional investors are adopting a stewardship code at home and abroad.  Furthermore, domestic and overseas proxy advisory firms’ influence over exercise of voting rights of institutional investors is growing.  Amid such a changing capital market environment, effectively communicating with various domestic and overseas shareholders to reflect shareholder opinions in the management process, and maintaining amicable relations with the capital market to secure fair evaluation from the market and enhance corporate and shareholder value have emerged as important goals.

Meanwhile, as for disputes over exercise of shareholder rights surrounding companies and their management, it is necessary to prevent and respond to such disputes with precautionary measures and response plans based on practical strategies.

Our Shareholder Activism Practice is comprised of attorneys specializing in advisory services and civil/criminal litigation, certified public accounts, tax accountants, patent attorneys, and expert advisors with unparalleled skills and experience in the relevant practice areas, providing comprehensive expert advice and solutions on both preliminary and follow-up matters with regard to all managerial issues relevant to shareholder activism.

Our team of professionals provides legal advice on capital market communications including investor relations of companies and their management, potential shareholder activism-related disputes based on shareholder composition analysis, business decisions related to shareholder activism of the board of directors and management, legal procedures relevant to board of directors and general meeting of shareholders, communications with shareholders including institutional investors and proxy advisors, shareholder activism negotiations, and proxy solicitation.   We also counsel clients on both preliminary and follow-up matters in shareholder activism-related disputes such as petitions for or preliminary injunctions on inspection and photocopying of shareholder registries and accounting books, or disputes surrounding the validity of resolutions by board of directors or general meeting of shareholders.

Regular/Preventive/Preemptive Advice on Shareholder Activism

In the past, shareholder activism issues in Korea concerned changes in corporate governance structure, business structure and assets-liabilities structure of business groups and affiliates.  Restructuring such as mergers/demergers, changes in the composition of board of directors and shareholder return have also often been key issues.  Lately, shareholder activism has expanded into day-to-day business activities such as company operation, affecting overall management strategies including certain M&A deals, operations, asset management, investment, dividend payment, acquisition and cancellation of treasury shares, and managerial appointments.

Accordingly, companies and their management need to regularly examine potential shareholder activism issues, come up with reasonable preventive measures, and effectively handle situations.

A failure to come up with sufficient preventive measures or after-the-fact response plans against shareholder activism or a failure to provide timely and effective responses during general investor relations activities as part of the response to the capital market or in response to shareholder letters and opinions from shareholders can expose companies and their management to shareholder disputes or managerial disputes. 

Our Shareholder Activism Practice is a team of attorneys and experts with a wealth of experience in advising and handling disputes involving shareholder activism issues and has handled a number of successful cases.  Drawing from such experience and past performance, our Practice provides advisory services to major business groups, conglomerates and medium-sized enterprises.

Prompt and Comprehensive Advice on Urgent Managerial Issues Involving Shareholder Activism

Kim & Chang’s Shareholder Activism Practice has provided prompt and comprehensive advice on urgent issues arising from shareholder activism.  Shareholder activism-related issues, which may emerge due to oppositions from dissenting or outside shareholders in the course of disputes over managerial control or a merger/demerger, require a comprehensive response based on an analysis and review of a variety of scenarios that may unfold, which goes beyond a response to the present issue.  Accordingly, handling of shareholder activism issues requires an exhaustive and detailed response plan which takes into account potential disputes and relations with other shareholders from a mid-to-long term perspective.  Thanks to our comprehensive experience and skills in providing advisory service, we have not only successfully helped clients on general matters but have offered prompt and comprehensive advice on pending and potential issues under exceptional circumstances such as managerial control disputes.

Comprehensive Advice on Various Shareholder Activism Issues and Special Issues

Our Practice consists of a large pool of professionals with the ability to provide legal, strategic, financial and tax-related advice on strategies, systems, rules and contractual devices to respond to shareholder activists.  With these capabilities, we are able to go beyond addressing our clients’ legal needs and  provide comprehensive solutions and effective follow-up management services.

Comprehensive Advice in Cooperation with Other Internal Practices

Response to shareholder activism does not end with voting at the general meeting of shareholders or handling disputes over preliminary injunctions and other matters.  To be free from ever-present risks, it is essential to implement fundamental changes to the business structure, corporate governance structure and external communication through analysis and elimination of the company’s issues or vulnerabilities that first gave rise to shareholder activism.  To offer permanent and comprehensive solutions, in addition to cooperating with the firm’s industry-specific practices, our Practice works hand-in-hand with (i) the Corporate Governance & Shareholder Disputes Practice, which provides comprehensive advice on corporate governance structure restructuring, such as conversion into a holding company, change of affiliate structure, and merger/demerger/spin-off merger for transparency in corporate governance; (ii) the Corporate Finance Practice, which provides regular/comprehensive advice to enable effective and legitimate financial management of companies; and (iii) the Anti-Corruption & Corporate Compliance Practice, which provides comprehensive advice on compliance check and improvement.