President Lee Jae-myung: 'Undervaluation of Korean corporate stocks is abnormal'
President Lee Jae-myung said on the 13th at a capital market roundtable held at the Korea Exchange in Yeouido, Seoul, that "the undervaluation of Korean corporate stocks simply because they are South Korean companies is an unreasonable abnormality." President Lee noted that "our stock market has recently undergone a significant correction," adding, "As the saying goes, where mountains are high, valleys are deep — and conversely, I believe that where valleys are deep, mountains may be high again." He added that the government's commitment and policies on capital market reform are once again being put to the test.
President Lee identified trust as the most important value in capital markets, arguing that the possibility of stock manipulation, executives' disregard for minority shareholders, profit siphoning through dual listings, and controlling shareholders' pursuit of private gain are fueling investor distrust.
On the response to unfair trading, President Lee said, "I have issued separate instructions to the Presidential Office urging strict enforcement against unfair practices in the financial and capital markets." He said stock manipulation and other unfair practices are being addressed firmly at the government-wide level, and that enforcement staff have been expanded.
On corporate governance, President Lee pointed out that "many companies are still valued below their book value," saying, "This does not seem to be solely a matter of earnings or growth potential." He remarked, "There is growing suspicion that share prices are being kept low to pay less inheritance tax," and diagnosed that "the core problem is a distrust that companies treat shareholders not as owners but as instruments to be exploited, or that controlling shareholders abuse their management control."
On institutional improvements, President Lee explained that with regard to the mandatory tender offer system, multiple factors are being weighed simultaneously so as to give minority shareholders a fair opportunity while preventing it from becoming an obstacle that effectively blocks mergers and acquisitions (M&A). Regarding the KOSDAQ market, he stressed the importance of properly applying delisting criteria to underperforming, low-performing companies to remove them swiftly from the market, while ensuring that companies with technological strength and growth potential are properly valued and do not suffer harm.
