The revised Commercial Act, which mandates the mandatory disposal of self-shares, has taken effect in South Korea as of the 6th of this month. Companies are now under pressure to comply with the new regulations that require them to burn self-acquired shares within one year from their acquisition. Additionally, companies must dispose of existing shares within 1.5 years from the law's enactment date. The purpose of this law is to prevent major shareholders from using self-shares as tools for management control while benefiting their own interests, thus infringing upon the rights of general shareholders.

In anticipation of these changes, large corporations are quickly crafting strategies to comply with the revised law. For instance, Samsung Electronics announced plans to utilize a portion of its self-shares for employee compensation while committing to the disposal of the remaining majority as per the new regulations. It is a significant shift, as Samsung holds a considerable number of self-shares, and their compliance sets a precedent for other companies in the market. Similarly, Doosan has also pledged to dispose of a large percentage of its self-shares this year.

However, there are exceptions under the new law for cases where self-shares can be retained or disposed of for operational purposes, such as employee compensation or planning indicated in company regulations. This adjustment showcases a nuanced approach to balancing corporate governance while protecting shareholder interests. Despite some companies attempting to circumvent this through share swaps, the overarching aim remains to ensure transparent and fair practices within the South Korean corporate landscape.