SOUTH KOREA Law and Practice Contributed by: Bo Hee Park, Minhyun Cho, Ian Kim and Jun Hee Kwon, Jipyong LLC
the notice may be replaced by public announcements in two or more daily newspapers at least twice each, or through Financial Supervisory Service’s Data Analy - sis, Retrieval and Transfer System (DART) or the KRX, as prescribed by the AOI. The notice must specify the date, time, venue and the agenda of the meeting; in principle, resolutions cannot be passed on items not Regarding the conduct of the general meeting of shareholders, the KCC provides no specific regula - tions other than those concerning the chairperson (who is appointed at the general meeting of share - holders if not provided for in the AOI). Typically, the meeting proceeds according to established practices. Generally, the representative director, representing the board of directors that proposed the agenda, explains the purpose of each item, responds to shareholder inquiries and then proceeds to a resolution. Resolutions Unless otherwise provided in the KCC or the AOI, the resolution of a general meeting of shareholders is adopted by a majority of the voting rights of the share - holders present and at least one-fourth of the total issued and outstanding shares (ordinary resolution). A special resolution is required for matters such as: amendments to the AOI, stock splits, granting of stock options, comprehensive exchange or transfer of shares, transfer of business, post-incorporation acquisition of assets, removal of a director or auditor, issuance of shares below par value, capital reduction, third-party issuance of convertible bonds or bonds with warrants, dissolution, continuation of the com - pany, mergers or divisions/merger-divisions. A special resolution requires the affirmative vote of at least two- thirds of the voting rights of the shareholders present and at least one-third of the total issued and outstand- ing shares. 4.4 Shareholder Claims Claims Against the Company Key claims that a shareholder may bring against the company include the following: specified in the notice. Conduct of Meetings
• lawsuits to nullify or revoke resolutions – if there are procedural or substantive defects in a resolution of the general meeting of shareholders, a shareholder may file a lawsuit to challenge its validity; • appraisal rights (right to request the purchase of shares) – shareholders who disagree with corpo - rate decisions that will bring about material chang - es to their interests – such as mergers, merger- divisions or the transfer of business – may demand that the company purchase their shares at a fair price; and • claims for dividend distribution – if a company fails to pay dividends despite a general meeting of shareholders resolution for dividend distribution, a shareholder may file a claim for the payment of such dividends. Claims Against Directors Regarding injunctions against illegal acts, shareholder derivative suits, and claims for damages, please refer to 3.8 Breach of Directors’ Duties and 3.9 Other Claims/Enforcement Against Directors/Officers . 4.5 Shareholders in Publicly Traded Companies Disclosure Obligations of Major Shareholders in Listed Companies Large-scale shareholding reporting requirement (5% rule) If the combined holdings of an individual and their joint holders reach 5% or more of the total outstanding shares, they must report the ownership percentage and purpose of holding (simple investment/general investment/influencing management) to the FSC and the KRX within five business days. Any subsequent change in ownership of 1% or more or a change in the purpose of holding must also be reported within five business days. In the event of a violation, the exer - cise of voting rights for the portion in violation will be restricted for a specified period. Reporting requirements for executives and major shareholders (10% rule) Executives or major shareholders who hold 10% or more of the total outstanding shares or exercise de facto management control must report their own - ership status within five business days of attaining such status. Any changes in ownership must also be
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