Law Firm Cheongchul's Attorney Eom Sang-yun conducted an interview with 'Law Leader' regarding the 'Capital Market Act's reporting obligations for large-scale holdings.'
Law Firm Cheongchul's Attorney Eom Sang-yun conducted an interview with 'Law Leader' regarding the 'Capital Market Act's reporting obligations for large-scale holdings.'
Recently, there have been numerous cases of violations regarding the obligation to report on ‘stocks, specific securities, etc. held, ownership status, and changes’ under the Capital Markets Act (hereinafter referred to as 'Capital Market Act'), which requires attention.
In practice, there are frequent mistakes regarding the scope of ‘specific securities, etc.’ that trigger the reporting obligation and the scope of ‘related parties’.
When holding convertible bonds, stock warrants (BW), exchangeable bonds (EB), etc., that exceed 5% of the total number of issued shares, it falls under the ‘specific securities’ subject to reporting obligation.
Major shareholders and executives of listed companies often face simultaneous obligations for ‘large holdings reporting’ and ‘ownership status reporting’. In this case, it is essential to note that reports must be filed for each obligation.
If the obligations of large holdings reporting and ownership reporting are not fulfilled, one may face criminal penalties, including imprisonment or fines, under the Capital Market Act.
Law Firm Cheongchul's Attorney Eom Sang-yun stated, “It is necessary to closely examine whether each of the requirements for large holdings and ownership reporting obligations are met.” He emphasized, “It is crucial to recognize that the obligation to report large holdings applies not only to common stocks but also to convertible bonds, stock warrants, and exchangeable bonds, and to be attentive to whether they fall under 'related parties.'”
For more details, the full interview can be found in the published transcript.
