Korea Seizes Exchange Operator After Dispute Over Management

By EVAN RAMSTAD

SEOUL -- The South Korean government on Thursday took control of Korea Exchange, the privately held company that owns and operates the country's stock exchanges, by invoking a monopoly law to designate it a publicly run firm.

The move escalates a nearly yearlong dispute between government officials and shareholders of the company, known as KRX, over its management.

It also represents a high-profile exception to President Lee Myung-bak's drive to reduce government involvement in the economy, which has included the privatization of state-run firms and elimination of regulations on details of South Korean life as minute as the price of beer and the type of heating that apartments can use.

The Ministry of Strategy and Finance announced the step as part of a broader revamping of state-run companies, which included the removal of 17 from the list of publicly run firms.
[The board at the South Korea exchange] Getty Images

The board at the South Korea exchange draws interest this week.

The ministry said the government can designate a company as publicly run if more than half of its revenue can be attributed to direct or indirect government aid. It added that the government indirectly supports KRX by granting it a monopoly on securities transactions and stock listings, which account for about 80% of the company's revenue.

The government said it won't take an investment stake in KRX, but it made no other statements about its future. A KRX spokeswoman declined comment after Thursday's announcement. The union that represents KRX workers criticized the action.

The Korea Stock Exchange, the largest of the three exchanges run by KRX, was privatized in 1998 after the government sold it to member brokerages and futures companies. In 2005, the company took control of the Korea Futures Exchange and Kosdaq, which trades shares of smaller-cap companies. Together, they form the seventh-largest bourse in Asia by market capitalization.

Today, its largest shareholder is Seoul-based Woori Investment & Securities, which owns 4.6%. Foreign-based brokerage firms own 10%. For much of last year, shareholders and managers considered the timing of a potential initial public offering for the company. Those plans were put on hold after the global economic crisis became worse in September.

The dispute with the government began early last year when the KRX board resisted some government officials' desire to name new senior executives. Afterward, the government's audit bureau and prosecutors launched investigations of the company, but they produced no accusations of wrongdoing.

Even so, talk of a government takeover of KRX has circulated for months. In recent weeks, exchange officials and shareholders expressed opposition to such a move in interviews with local media.
—Kanga Kong contributed to this article.

Write to Evan Ramstad at evan.ramstad@wsj.com

Views: 36

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

"Destroying the New World Order"

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

TOP CONTENT THIS WEEK

Latest Activity

Chris of the family Masters commented on Phyllis Maka's blog post WEIMAR HYPERINFLATION IS COMING - Aim4truth
"I'm surprised it's not here already...."
4 minutes ago
Chris of the family Masters favorited Phyllis Maka's blog post WEIMAR HYPERINFLATION IS COMING - Aim4truth
5 minutes ago
jittery is now a member of 12160 Social Network
9 minutes ago
Central Scrutinizer favorited Doc Vega's blog post The Path
12 minutes ago
Central Scrutinizer commented on Doc Vega's blog post The Path
"crazy..... puff puff pass sum of dat chit ya smokin' doc ...lol Good'n!"
15 minutes ago
Twilight Zone favorited Phyllis Maka's blog post WEIMAR HYPERINFLATION IS COMING - Aim4truth
15 minutes ago
Chris of the family Masters posted blog posts
22 minutes ago
Doc Vega posted blog posts
37 minutes ago
Phyllis Maka posted blog posts
47 minutes ago
Doc Vega and Larry Flinchpaugh are now friends
1 hour ago
Central Scrutinizer commented on Old Denmark's video
Thumbnail

Colorado plane debris: Video shows parts of a plane in Colorado scattered across a neighborhood

""Honey, somebody dropped off an engine cowling on the front porch, did you order it?""
1 hour ago
Central Scrutinizer favorited Chris of the family Masters's discussion Gary D. Barnett - Our Only Recourse is Civil Disobedience
1 hour ago
Phyllis Maka commented on Phyllis Maka's blog post 2.0 Who Or What Is THE CROWN? By John Hardon Jewish Banishment And The "City" Of London
1 hour ago
Larry Flinchpaugh commented on Larry Flinchpaugh's blog post COVID 19 reporting
"The c-span video does verify Dr. Redfield's statement about hospitals possibly inflating the…"
1 hour ago
Chris of the family Masters commented on Phyllis Maka's blog post 2.0 Who Or What Is THE CROWN? By John Hardon Jewish Banishment And The "City" Of London
"Legal is about the commerce, lawful is about men and women."
1 hour ago
Chris of the family Masters favorited Phyllis Maka's blog post 2.0 Who Or What Is THE CROWN? By John Hardon Jewish Banishment And The "City" Of London
1 hour ago
Twilight Zone commented on Central Scrutinizer's blog post UK: HEALTH AUTHORITIES ANNOUNCE NOT A SINGLE CASE OF FLU DETECTED THIS YEAR
2 hours ago
Twilight Zone posted photos
2 hours ago
Chris of the family Masters posted discussions
2 hours ago
Chris of the family Masters commented on rlionhearted_3's photo
Thumbnail

Inconvenient Truth

"Tell me about it...."
2 hours ago

© 2021   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted