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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] President Lee Jae-myung has raised concerns over the LS Group’s dual listing practices during a luncheon with the Democratic Party’s KOSPI 5000 Special Committee, calling them a major contributor to the so-called “Korea discount,” Kookmin Ilbo exclusively reported on January 22.
According to the report, President Lee cited recent media commentary criticizing LS Group’s overlapping listings, referencing an article titled “I Don’t Buy Stocks Starting with ‘L.’” He reportedly said that such dual listings undermine investor confidence and argued that the stock exchange should not allow practices that dilute shareholder value.
A lawmaker from the KOSPI 5000 Special Committee told Kookmin Ilbo that the issue was discussed as part of broader efforts to normalize Korea’s capital markets and ensure the successful stabilization of the KOSPI 5000 initiative. The lawmaker compared the LS case to the 2022 spin-off and listing of LG Energy Solution from LG Chem, which triggered a sharp decline in LG Chem’s share price and fueled criticism of parent-subsidiary dual listings.
LS Group has recently pursued the listing of Essex Solutions, a non-listed great-grandchild subsidiary, and is reportedly reviewing potential IPOs for other core affiliates such as LS MnM and LS Cable. Critics warn that listing both parent and subsidiary entities dilutes the value of parent-company minority shareholders while also eroding trust in the market. An alliance of LS minority shareholders has actively opposed the move, labeling it a potential “second LG Energy Solution case.”
The luncheon also addressed additional legislative measures, including the so-called “stock price suppression prevention bill” and the third amendment to the Commercial Act. According to Kookmin Ilbo, President Lee and committee members discussed accelerating reforms to curb practices in which controlling shareholders intentionally keep stock prices low to minimize inheritance and gift tax burdens.
Oh Ki-hyung, chair of the KOSPI 5000 Special Committee, was quoted as saying that institutional reforms are essential to resolving the Korea discount, noting that Korea’s price-to-book ratio (PBR) remains well below those of major global markets. He added that discussions also included mandating the cancellation of treasury shares and tightening rules on dual listings to promote sustainable growth and restore investor confidence in Korea’s capital markets.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
