Will squeeze-outs under Korea's new Commercial Code work?

Abstract

The most extensive revisions of the Korean Commercial Code (KCC) took effect on April 15 2012. Of these amendments, the most notable is the express inclusion of a new squeeze-out mechanism through compulsory acquisition. It means minority shareholders can be required to sell their shares at an agreed price to a controlling shareholder. If no agreement is attained, the shares must be sold at a fair price as determined by the court. Though quite straightforward at first glance, the compulsory acquisition entails many issues and uncertainties. This is because the relevant KCC provisions are unclear in some respects and there are no court precedents in Korea directly applicable to compulsory acquisition.