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2009, Vol.18, No.1

  • 1.

    The Size of Government Liabilities in Korea : Concept, Issues and Policy Implications

    Oak Dong-Suk | Ha Yoonhee | 2009, 18(1) | pp.3~37 | number of Cited : 11
    Abstract PDF
    The concept of National Debt, being used traditionally by Korean government, is very much different from that of ‘General Government Gross Financial Liabilities’ defined by SNA and GFSM criteria. The purposes of this study are to show which public institutions are included in the general government sector and to estimate the size of the Korean ‘General Government Gross Financial Liabilities’ in 2007.
  • 2.

    The EC Leniency Policy on the Whistle Blowers in Cartel Cases and Its Lessons

    Lee, Hosun | 2009, 18(1) | pp.39~72 | number of Cited : 8
    Abstract PDF
    Cartel is one of the most serious violations of competition law, so it is (should be) severely punished by every competition authorities, even the participant's staffs being sentenced to imprisonment. However, since its covert disposition makes it disclosed, competition authorities are trying to dissolve and prevent cartels through the leniency policy to the 'whistle blower' as well as harsh retribution. In this article, the author has studied and searched in why the EC Commission has changed its leniency program since 1996, when its first Notice had been introduced. The focuses are on the goal and means of Commission's current leniency program, especially on the way of removing legal uncertainty, and worse position in the public or civil judicial procedure than those cartel participants who keep silent. While exploring this topic, some useful ideas are compared with our leniency system to enable to carry its policy reasonably. The author cannot agree with the policy that the absolute immunity contains not only the fines but also remedy measures, and that the cooperator after the investigation might enjoy the equal benefits as the whistle blower. This article also shows that we need to establish the criteria on how the evidences are collected, placed, and used to protect the whistle blower's adverse legal position in the third countries' court.
  • 3.

    Regulations of Foreign Direct Investment on National Security Grounds: Comparison of Korean and the U.S. Regulations

    Kim, Kwan Ho | 2009, 18(1) | pp.73~105 | number of Cited : 6
    Abstract PDF
    Korean government introduced foreign investment regulations enabling restrictions against foreign investment based on national security concerns by amending the Presidential Decree of the Foreign Investment Promotion Act. This is the outcome of the administration's partial acceptance of demands from business groups and parliament for a law to protect Korea's key industries from hostile foreign merger and acquisition attempts. This paper explores the nature of Korea's regulations of foreign direct investment on national security grounds by comparing with the U.S. regulations. While the U.S. regulates foreign investment under broad concept of national security, including transactions on critical infrastructure and transactions involving foreign government- controlled entities, Korea‘s regulations apply only to the transaction cases in industries closely related to military security. The structure of regulatory body and the process of review and investigation are also designed to minimize the negative effects discouraging foreign investment rather than to carefully scrutinize security concerns. Less restrictive nature of Korea's regulations can be explained by the fact that attracting foreign direct investment is a highly ranked policy agenda in Korea. It can be also linked to Korean government's willingness to comply with the obligations under international investment agreements. This paper concludes that regulating foreign direct investment on national security grounds has legitimacy only when real threat to security is posed. The regulations should not be abused for the purpose of only protecting local management control.
  • 4.

    Legitimate Regulation regarding Leveraged Buy․Out : Critical Analysis on Korea's Supreme Court Decision Applying Breach of Trust in Office (Criminal Code 356)

    이상현 | 2009, 18(1) | pp.107~141 | number of Cited : 15
    Abstract PDF
    Leveraged Buy․Out (LBO), which lets a target company offer its assets as security for buyer's debt incurred to purchase the shares of the target company, has both advantages and disadvantages. While the advantages of LBO are activation of M&A with less financial resources, synergy effect, re․organization of corporation, the usage of high․leveled business and financial skills, leverage effect as well as improvement of business activities, its disadvantages are the increase of corporate debt, threats to creditors of the target company, the possibility of bankruptcy, conflict of interests between shareholders and directors, and between shareholders and investors, and the potential abuse of LBO by private equity fund which pursues only for short․term gains from re․sale. Advanced market economies including the U.S., U.K, Germany, Italy and Japan, have developed case laws, regulations and statutes regarding LBOs in the civil or corporate law area. The U.S. judiciary body, once liberalizing LBO deals, has developed entire fairness doctrine for fiduciaries' liability, requiring compliance with procedural rules e.g. disclosure of material information. On the other hand, member countries in EU, which adopted strict prohibition against LBO under the Second Directive Art.23(1), gradually, however, have widened exemptions through revision of their domestic civil or corporate laws. Japan also allowed LBO by adopting Industrial Revitalization Corporation Act. The Supreme Court of Korea, on the other hand, issued a decision (2004도7027) penalyzing an LBO which turned out to be successful through purchasing an ailing company under legal management. This thesis analyzes the elements of breach of trust in office (Criminal Code Art.356), thereby proffering unique theories, such as implied approval by principal through speculative trading analogy, decision of harm in light of corporate rehabilation plan. It argues that the LBO, complied with corporate law and related procedures including full disclosure of material information, may be legitimized. The application of breach of trust in office (cc.356) to LBO will cause more harms to corporations than benefits as potential benefits from restructuring the ailing company is driven away. The maintenance of balance between possible advantages and disadvantages of LBO can be more effectively achieved through the application of corporate law and enactment of financial law including share․mortgage, limitation of financing to a certain level, and minimum owned․capital․input requirement.
  • 5.

    Economic Analysis of Dual Class Stock

    박양균 | 2009, 18(1) | pp.143~172 | number of Cited : 16
    Abstract PDF
    Dual class stock is issued by a company giving different voting rights based on an investment of equal value. By issuing the dual class stock, managers can exercise control rights of corporate governance with small equity rates. Most people have regarded the principle of one share one vote as mandatory rule. But historically shareholders have exercised various voting rights, one shareholder-one vote and prudent mean vote, one share-one vote etc. Therefore One share-one vote should not be understood as dominating rule with no exceptions. If shareholders agree voluntarily the contract of issuing dual class stock, it does not infringe the principle of shareholders' equal treatments and all the parties get the benefit from the contract. The prohibition of dual class stock violates the freedom of contract and lowers the market efficiency. Therefore, shareholders must be given the choice to decide on issuance of the dual class stock.
  • 6.

    Selbstverwaltungsprinzip und Bestellung der Ämter bei Genossenschaften-in Hinblick auf die Reform des Gesetzes über Fischerreigenossenschaften-

    Lee Byung-Jun | 2009, 18(1) | pp.173~206 | number of Cited : 3
    Abstract PDF
    Selbstverwaltungsprinzip bei Genossenschaften bedeutet, dass die Verwaltung und Ämter durch Genossen durchgeführt bzw. besetzt werden sollen. Dieser Grundsatz wird als Grundprizip einer Genossenschaft anerkannt. Dieser Aufsatz kritisiert den Entwurf des Gesetzes über Fischerreigenossenschaften in dieser Hinsicht.
  • 7.

    Searching for Substantial Conditions in Applying CBA of Risk Regulatory

    Cha Min Yuh | Tae-Yun Kim | 2009, 18(1) | pp.207~243 | number of Cited : 20
    Abstract PDF
    Decision making on risk regulation should be based on cost-benefit analysis rather than no-risk criterion. However actually we encounter some problems such as methodology and data problems when applying the CBA. Therefore we need some substantial conditions in order to solve these problems. So far most studies are focused on the monetization and quantification of related cost and benefit and relevant methodological debate. This study focuses on finding substantial conditions which will motivate CBA of risk regulatory to revitalize and proliferate in the practical analysis process. For this purpose, this study reviews the relevant theories in respects of rationale of risk regulatory and CBA and elicits the implications through which substantial conditions are constructed. Finally, we reconcetualize this substantial conditions into practical guidelines, apply them to the consumer product safety case and identify its usefulness.