Title: “Bank of Korea Nominates Hwang Gun-il as Monetary Policy Committee Member | Doosan Cleared of Accounting Irregularities | FSC Enhances M&A Regulations

South Korea’s Central Bank Nominates Hwang Gun-il as a Member of Monetary Policy Committee

The Bank of Korea has nominated Hwang Gun-il, former Executive Director of the World Bank, as a member of its Monetary Policy Committee. This appointment is expected to bring new perspectives to South Korea’s economy. The committee, consisting of seven members, including the Bank’s Governor, is responsible for making key decisions regarding monetary policy.

Financial Watchdog Clears Doosan Mobility Innovations of Intentional Accounting Irregularities

Doosan Mobility Innovations has been cleared of allegations of intentional accounting irregularities by the Financial Services Commission’s Securities and Futures Commission. The company has been subjected to a disciplinary action categorized as “minor fault,” allowing it to avoid prosecution and lift the trading suspension. However, it is expected to face fines amounting to approximately 250 billion won. This resolution has resolved the uncertainties surrounding the accounting irregularities since April 2021.

Financial Services Commission Enhances M&A Regulations

The Financial Services Commission (FSC) has decided to enhance the regulations governing mergers and acquisitions (M&A). As a result, minority shareholders now have the ability to access detailed information regarding M&A transactions. Companies are required to disclose the background, merger partners, and timing of the M&A, as well as the board of directors’ opinion. These changes provide greater transparency and enable minority shareholders to make more informed decisions.

The FSC has also relaxed the regulations on determining the M&A transaction value. Non-affiliated companies can now autonomously determine the transaction value without mandatory application of the capital market law’s valuation formula. However, third-party verification of the transaction value has become mandatory. These improvements are seen as measures to stimulate M&A activities and increase transparency in such transactions.

The FSC has decided not to apply these enhancements to mergers between affiliated companies, as such mergers may disadvantage minority shareholders. The FSC plans to review regulations regarding mergers between affiliated companies at a later date.

Furthermore, external evaluation procedures have been improved. If accounting firms have participated in the determination of the transaction value, they are prohibited from conducting the valuation. This separation of roles eliminates the risk of self-evaluation. These improvements are intended to enhance the transparency of M&A transactions.