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Corporate Governance & Shareholder Disputes

“Outstanding capabilities in corporate law and frequently praised for its large and experienced bench.”
– Chambers Global 2018

Overview

The Corporate Governance & Shareholder Disputes Practice is composed of attorneys, certified public accountants, and industry experts who have specialized knowledge and in-depth working experience in the fields of business strategy, corporate finance, large-sized company regulations, financial supervision, capital markets, finance, fair trade, accounting, and tax affairs (corporate income tax, succession tax, and gift tax, among others). 

We provide legal advice on a variety of issues ranging from corporate governance of large and medium-sized corporations overseeing multiple business divisions, to business groups, including both financial groups and non-financial groups.  Our Practice provides innovative and comprehensive solutions tailored to the specific needs of each of our clients, minimizing any risks associated with changes in the business environment while provides achieving specific strategic goals.

Business Restructuring of Financial Companies and Establishing Financial Holding Companies

Our Practice has provided legal advice to every domestic financial holding company that has been established in Korea since the enactment of the Financial Holding Companies Act.  In particular, we have provided comprehensive advice to the six domestic financial holding companies that have been established in the past six years, not only on the establishment of the holding company itself, but also relating to preliminary and follow-up matters, such as relevant law and policy developments.

Restructuring of Corporate Governance Structure of Affiliated Groups, Including Establishment of Non-Financial Holding Companies

Our Practice has successfully provided legal advice on the establishment and conversion into a non-financial holding company to numerous large and medium-sized business groups.  We have a large pool of professionals who are well versed in the client’s industry and business operations through their extensive hands-on industrial government experience.  As a result, our professionals present cutting-edge and effective solutions which address the specific needs and concerns of our clients and provide tailored advice through direct coordination with our company officers and employees.

One-Stop Total Solution Services for Corporate Governance Restructuring, Including Financial and Non-Financial Affiliate Groups

Our Practice provides one-stop service regarding by pooling professionals to address complex issues and meet diverse needs relating to business operations of financial holding companies, non-financial holding companies, banks, and insurance companies.  We have exclusive experience in providing successful solutions for regulatory bodies and clients in establishing financial holding companies and business restructuring.

Our Practice set the standard for establishing a non-financial holding company to create a financial group for the first time in Korea.  By doing so, we provided comprehensive legal advice on establishing an insurance holding company through a horizontal spin-off from a financial institution, simultaneously listing a financial holding company and its core financial institution, and successfully incorporating the core financial institution as its subsidiary through a takeover bid. Also unprecedented in Korea, we advised on the establishment of a financial holding company for the Korea Development Bank (KDB), a financial institution that is established and operated pursuant to special law, by advising an amendment of such special law. In the case of business restructuring of National Agricultural Cooperative Federation (NACF), we successfully advised on the simultaneous establishment of five companies including a financial holding company, a non-financial holding company, bank, non-life insurance company, and life insurance company, through two consecutive spin-offs.

Business Strategies to Execute Reorganization of Corporate Governance for Business Groups Including Holding Companies and Affiliates Ownership Structure

Due to their gravity and complexity, issues on corporate governance of both financial and non-financial holding companies, officer qualifications and restrictions on holding concurrent posts, outsourcing, sharing of client information amongst financial institutions, and operation of integrated facilities should be addressed in accordance with relevant laws and regulations.  As our Practice has a long standing history and hands-on field experience in communicating with government regulators, we can provide prompt and efficient legal advice on complex issues for optimal solutions meeting our clients’ business needs.

Key Servicesshow

Strategies to Establish or Convert into Financial Holding Companies

We provide legal advice pursuant to the Financial Holding Companies Act and the other financial laws on the following issues in establishing and converting into bank holding companies and non-bank holding companies (including insurance and financial investment holding companies): 

 

  • Verification on the necessity and appropriateness of converting into a holding company system and preparation of optimal structure and procedures for conversion;

  • Review of cost for conversion including related taxation and other fees;

  • Prediction on corporate governance including change of ownership ratio;

  • Preparation of application for license and other documentation;

  • Advising on licensing procedure of the Financial Services Commission (FSC);

  • Advising on establishing and operating financial holding companies;

  • Support in incorporation as subsidiary or lower-tier subsidiary and acquisition of related FSC approval;

  • Advising on corporate governance of the financial holding company system; and

  • Advising on outsourcing, concurrent position holding by officers, sharing of client information, and functional integration.

 

Strategies to Establish or Convert into Non-financial Holding Companies

We provide solutions for establishing and operating holding companies  under the Monopoly Regulations and Fair Trade Act by examining the following issues: 

 

  • Analysis on the validity of converting into a holding company and the provision of rationale for such conversion and its appropriateness;

  • Provision of optimal structure and strategy for conversion;

  • Requirements for establishment of a holding company, procedures for establishing or converting into a holding company, and schedule for such conversion;

  • Advice on estimation of cost, including tax for converting into a holding company;

  • Advice on conversion method, such as all-inclusive stock transfer/swap, spin-off, merger, merger through spin-off, business transfer, and investment in kind;

  • Advice on regulations regarding listed companies and procedure for tender offer;

  • Advice on business strategy and operation of holding companies; and

  • Preparation of subsidiary management plan including incorporation as subsidiary.

 

Advisory Services for Reorganization of Group Investment Structure

We provide legal advice to business conglomerates and large business groups, including financial affiliates or financial affiliated companies on the following:

 

  • Management plan and investment structure reorganization plan for financial affiliates;

  • Strategy on governance structure regarding separation of financial and non-financial capital;

  • Preparation of an optimal plan for dissolving or mitigating cross-shareholding and interlocking investments in various forms;

  • Restricted voting-rights caused by separation of financial and non-financial capital and affiliates ownership structure; and

  • Any and all practices regarding reorganization of investment structure and ownership structure between affiliates or related companies.

 

Advisory Services for Affiliates Restructuring

We provide legal advice on the following issues to enhance business efficiency and maximize corporate value of a business group: 

 

  • Establishment of reorganization strategies for group affiliate portfolios and business portfolios;

  • Separation of affiliates and procedure for implementation;

  • Reorganization of affiliate structure including consolidation of affiliates;

  • Establishment of strategy to improve financial structure including reorganization of affiliates' assets, liabilities, and capital;

  • Estimation of financial effect and business performance following reorganization of affiliates structure; and

  • Estimation of transaction costs and relevant taxes following reorganization of affiliates structure.

 

Advisory Services on Vertical or Horizontal Affiliation of Intercompany Transactions and Intra-Company Transactions

We provide comprehensive legal advice necessary for the efficient management of problems arising from intercompany transactions including the following issues: 

 

  • Due diligence on intercompany transactions;

  • Assessment of profit and loss from intercompany transactions;

  • Estimation of tax burden regarding intercompany transactions;

  • Assessment of regulatory risk arising from intercompany transactions;

  • Provision of efficient solutions for intercompany transactions including proposal of alternative transaction structures and corporate governance structures; and

  • Review on conflict of interest issues and establishment of plans to minimize transaction costs caused by intercompany transactions.

 

Advisory Services for Forming Stable Governance Structures

We provide legal advice necessary for sustainable corporate growth and development on the following issues: 

 

  • Protection of management rights;

  • Establishment and implementation of strategies for forming a stable governance structure;

  • Job assignment and allocation of authorities in management; and

  • Any and all issues regarding management rights and succession of governance structure.

 

Advisory Services for Overseas Affiliates’ Governance Structure and Incorporation of Overseas Holding Companies

With today’s globalization and localization of businesses and increase in overseas intercompany transactions, we provide legal advice on:

 

  • Preparation of strategies for overseas affiliate structures and intercompany transactions;

  • Establishment of overseas holding companies necessary for overseas intercompany transactions and management of overseas subsidiaries; and

  • Governance structure of overseas affiliates.

 

Advisory Services for Management Supervision Including Conflict of Interests and Operation of Board of Directors and Audit Committees

Issues on governance structure of individual companies and conflict of interest require comprehensive and professional analysis encompassing various laws of diverse special fields including not only the KCC, but also the FSCMA, MRFTA, multiple tax laws, and even criminal law.  We provide legal advice on the following issues: 

 

  • Constitution and operation of the board of directors;

  • Constitution and operation of internal audit organizations, including audit committees;

  • Regulation and solutions for issues regarding director’s self-dealing and misuse of business opportunities;

  • Exercise of minority shareholders’ rights and management liability;

  • Management of officer liability (including directors, auditors, and executives) by enhancing rationality in managerial decision-making; and

  • Clarify rights and obligations of interested parties and comply with legal procedures in order to prevent potential disputes on an ex ante basis and solve materialized disputes on an ex post facto basis.

 

Key Experiencesshow

Our Corporate Governance & Shareholder Disputes Practice provides legal advice to various business groups and corporations including the following: 

 

  • Business group which owns a number of affiliates and related companies, and that is considering a conversion into a holding company system;

  • Financial group which owns multiple financial affiliates, and that is considering an establishment of a financial holding company; 

  • Business group which includes both financial and non-financial affiliates;

  • De facto holding company including core affiliates of a business group and companies whose equities are largely held by affiliates; 

  • Large and medium-sized companies engaging in various sectors of business; 

  • Business group and investment company related to cross-shareholding and interlocking investment; 

  • Business group with significant intercompany transactions or the affiliate in concern; 

  • Group affiliates that have frequent transactions with overseas subsidiaries or affiliates; and 

  • Financial and non-financial holding companies.

 

Our Practice is currently providing legal advice on the establishment of multiple financial and non-financial holding companies, and our recent major assignments include the following:

 

  • Advised on governance restructuring of Hanjin Group including spin-off of Korean Air Lines Co., Ltd. and establishment of a holding company.

  • Advised on converting into a holding company of Automobile Part Manufacture Company including dissolution of cross-shareholding

  • Advised on capital reduction of Hanjin Energy Co., Ltd.

  • Advised on establishment of NongHyup Financial Group Inc., Nonghyup Agribusiness Group Inc. (non-financial holding company), NongHyup Bank, NongHyup Property & Casualty Insurance Co., Ltd., etc. through business restructuring and spin-off of National Agricultural Cooperative Federation (“NACF”).

  • Advised on creditor protection procedure regarding the spin-off of NACF and on Global Consent Solicitation for MTN (mid-term note) creditors. 

  • Advised on business restructuring of National Federation of Fisheries Cooperatives.

  • Advised on spin-off of Korean major Fire & Marine Insurance Co., Ltd. and establishment and operation of Insurance Holding Group Inc.

  • Advised on merger through spin-off of Korea Confidence Information Co. and Nice Information Service Co., Ltd.

  • Advised on establishment and operation of a holding company of Doosan Group. 

  • Advised on spin-off for multiple Doosan Group affiliates including spin-off of Doosan Infracore Co., Ltd. 

  • Advised on spin-off of Samhwa Crown & Closure Co. Ltd.

  • Advised on establishment and operation of a holding company of Taekwang Group (TBROAD Holdings Co.,Ltd.)

  • Advised on establishment and operation of a holding company of Korean major Distribution Enterprise.

  • Advised on spin-off of a credit card company of KB Financial Group Inc. 

  • Advised on establishment of a financial holding company of The Jeonbuk Bank Co., Ltd. 

  • Advised on establishment and operation of a financial holding company of Busan Bank Co., Ltd.

  • Advised on establishment and operation of a holding company of Daegu Bank Co., Ltd.

  • Advised on establishment and operation of a financial holding company of Citibank Korea Inc.

  • Advised on restructuring of The Korea Development Bank (KDB) Group, spin-off of KDB, establishment, and operation of KDB Financial Group Inc. 

  • Advised on establishment and operation of a financial holding company of Kookmin Bank.  

  • Advised on establishment and operation of a financial holding company of SC First Bank Korea Limited.

  • Advised on establishment and operation of a financial holding company of Woori Bank.

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