In the past, a number of reforming measures have been taken to improve the corporate governance framework and enhance shareholder``s rights especially in the area of the corporate law. In addition, recently, legislators proposed lots of proposal to reform the corporate governance, although they have noteworthy differences of measures to strengthen the accountability and motivate the incentives of directors to align with the interest of shareholders. In this paper I review of salient congressional themes about corporate governance that was suggested in the form of legislator``s proposals during recent 3 year-period. Those proposals focus on the shareholder power over directors and engaging in independent and robust monitoring, oversight, and policing of managers. This try can be evaluated to directly push shareholders and outside directors to police managers. However, this try has some limits. Because this aims and reflects the corporate governance mandate. On the other hand, the legislator``s incentive is not the same with shareholders``. Generally, the legislators hear the voice of their supporters and sometimes they want to make new practices that would make it harder for executives to deprive of the shareholders``s benefits. However, on the other hand, the legislator``s could hear the voice of executives and compromise how to reform and make new corporate governance practices. Accordingly the process and environment of corporate governance law making should be encouraged to take care and review by the public and shareholders more actively. On the other hand, from the perspective of technique of regulation, cost-effective regulation should be cultivated and need to be adopted. For example cost effective shareholder power should be supported and guaranteed. I should highlight the point that empirical studies show that although lots of reforming measures for corporate governance had been taken, the reality is not guarantee the good corporate governance at all. In this sense, to parallel with direct regulation and mandate, it would be effective to use indirect regulation technique. This form of regulation can be imposed by stock exchanges in their listing requirements, not by provisions of corporation law. Generally this kind of technique is called as ``soft rule``. This kind of rule could create more stricter standards of independent directors and board committees(for examples audit, compensation, nominating committees) with the aiming of making directors more genuine monitors of and watchdogs over executives.

Strong M&A activities are of great importance to economic dynamics of a country as well as growth of an enterprise. Korean government has shown keen interest in preparing business friendly M&A rules, as witnessed by a reform bill submitted by the Ministry of Justice in 2014. Flexible M&A rules, however, often risk the interest of minority shareholders because a transfer of wealth might be secretly and implicitly made under the process of complicated M&A deals. This paper is to analyze two bills recently submitted by the Members of the National Assembly. Balancing the initiative by the government in favor of the business community, those bills are focused upon the protection of minority shareholders. The paper is to deal with the uneasy task how to reconcile the conflicting goals of adopting business friendly M&A rules and providing sufficient protections for minority shareholders. First part of the paper is concerned with corporate division (or demerger). The Korean Commercial Code ("KCC") has provided detailed provisions on corporate division. The corporate division regime under the KCC adopted in 1998 is frequently used for the purposes of corporate restructuring. In a corporate division, the shares of new entity (Y) separated from the old company (X) are supposed to be distributed to incumbent shareholders of X, which makes the shareholding ratio of Y just the same as that of X. The problem begins where X has treasury shares: dominant Korean business practices allow the distribution of Y shares even to those treasury shares. Accordingly, as far as Y is concerned, the controlling shareholders of X get strengthened grip thanks to the existence of treasury shares in X. For example, if X``s shares were owned by P(42%), Q(28%) and X(30%, treasury shares) and some business department of X was separated into new company Y via corporate division, P``s actual ratio in Y shall be drastically increased to 72% {42% + 30%(held by X which is controlled by P)}. The new bill prohibits the distribution of new shares to treasury shares. While some concern was raised that such reform shall chill corporate division activities, the new bill seems to be in the right direction. The current practice is far from creating values from M&As but serves the benefit of controlling shareholders to the detriment of minority shareholders. Second part is about the shareholder approval upon controlling share block sales. Unlike statutory merger and comprehensive business transfer, the KCC has not required any shareholders`` control in case of share deals. The new bill, however, adopted a requirement of the shareholders`` special resolution provided that the size of the share deals is quite large (i.e. 50% or more of the net asset of the transacting party). The paper thoroughly reviewed the rationales of the new bill from the theoretical basis as well as comparative legal analysis. Under the author``s opinion, the new bill seems persuasive as far as it requires the approval of the shareholders`` meeting in an acquiring company. There have been many cases in Korea that controlling shareholders and directors, due to their ambition to enlarge their conglomerate, failed to correctly estimate the value of target company``s shares, ending up so-called winner``s curse. The scope and specific requirements of the shareholders`` approval under the new bill, however, need to be streamlined.

With respect to the merger between Cheil Industries Inc. and Samsung C&T Corporation(hereinafter, "the Company"), there are three issues that can be discussed in light of shareholders`` proportionate interests and unjust wealth transfer between affiliate group shareholders and the residual non-group shareholders. The first question is the timing and the disclosure as to the merger. This question will include how the merger was timed and how the information thereof was disclosed in order to address the conflict of interests of the directors of the Company who were appointed by Samsung Group. Weinberger v. UOP case (Del. Suppr. 1983) will shed much light on this issue, where the court ruled that fiduciary duty shall include the question of how the transaction was timed, initiated, and structured in a self-dealing situation. The second question is whether the directors took any actions to explore other options than the merger which should be subject to the Capital Market Act, where the merger ratio would not be favorable towards the non-group shareholders in the Company. The alternative option would include to distribute to the shareholders or sell in the market the listed stocks which the Company held and of which the market value was higher than that of the Company itself. The third question is the Revlon duty under the sale of control situation in light of that the Company``s ownership structure would be changed from "fluid" or "weekly concentrated" to "concentrated" or "significantly concentrated" due to the merger with Cheil Industries Inc., which had the higher concentrated ownership structure. This feature is in the wake of Paramount v. QVC Network the Delaware case and Revlon. While these issues are essential for the shareholder interests, they were not spotlight in the litigation in Korea between the Company and Elliot, the hedge fund. The reason is due to two factors: one is the Korean Supreme Court``s ruling under Everland case which declared that shareholders`` interests are not protected by the fiduciary duty of the corporate directors, and the other is the Korean Commercial Codes which is hardly aware of the notion of affiliate entities and conflicts of interests between shareholders. These two are the main factors of so called "Korea Discount" in the Korean stock market, which should be lifted and revised by introducing the notion of corporate fiduciary duty towards the proportionate interests of shareholders as in the US corporate laws.

This year``s merger between Samsung C&T Corporation (hereinafter CT) and Cheil Industries Inc. (hereinafter Cheil) incurred strong oppositions by Elliot Associate L.P. (hereinafter Elliot); Elliot exercised its minority shareholder rights insisting that this merger went contrary to the interests of both CT and its shareholders. However, a series of countermeasures taken in the pursuit of the merger by CT``s management against Elliot could be evaluated insufficient in a third person perspective. In an important transaction of a company, the desirable standard is whether that transaction contributes to the long term benefits of that company. This decision is not up to a controlling shareholder/the board of directors but to the shareholders`` meeting on the condition that precise/enough information is provided to all shareholders. In this point, the merger process and the CT``s reaction against the other shareholders including Elliot considerably fell short of the desirable level. Generally in a situation where there might be big interest conflicts with other shareholders, the party should open this situation and suggest conflict mitigating plan. Majority of Korean large listed companies have their controlling shareholders so there always exist the possibilities of interest conflicts between controlling shareholder and the company/minority shareholders. For example, controlling shareholders can abuse their power in determining merger ratio and/or disposal of company``s own shares in favor of his/her benefit, harming the interests of both the company and other shareholders. Therefore, the standard of judicial review in Korea should also reflect the situation of large listed companies-majority of them have controlling shareholders; the judicial review can consider accepting entire fairness standard of interested director/controlling shareholder from Weinberger v. UOP, Inc. Usually, the takeover defense by a company is directly connected to interest conflicts for the benefit of managements/controlling shareholders so enough devices against abusing their defenses must go in a dispute situation; it is not sufficient in interest conflicts situation to tell that managements/controlling shareholders obey the current legal requirements for each act. Ultimately, introduction of controlling shareholders`` fiduciary duty in Korean law will be the fundamental solution for the pursuit of interests of a company/total shareholders with lowest social cost as it will filter in advance activities which may have concerns of interest conflicts.

Recently, in response to the changing economic and transport environments, commercial law and relevant transport regulations have undergone revisions. In 2007, a major amendment to sea transport law was made, and in 2010, some provisions related to land transport were modified. In 2011, a new chapter regulating air carriage was inserted into commercial law, followed in 2014 by another amendment which increased the liability limit of air carriers. To address the rapidly changing transport-logistics environment, the Ministry of Justice has submitted a bill to amend rules related to land transport, insert provisions regarding multimodal transport and again raise the liability limits of sea and air carriers. The bill is before the 19th National Assembly for approval. This study explains the content and legislative intent of transport-related bills submitted to the 19th National Assembly, covering land, multimodal, sea and air transport. Problems and issues raised in the field after the release of legislation are discussed, along with the relevant provisions. Finally, measures to improve these bills are suggested: 1) ensure the effectiveness of the obligatory issuance of multimodal transport documents; 2) review the consistency of the provisions applied to different modes of transports; and 3) strengthen electronic transport documents.

Account Receivable Financing can be a thirst-quenching alternative financing to small and medium companies who could not have limited access to traditional financing methods such as capital market and bank loan. Sale and assignment of account receivables, discount of account receivables, borrowing with security interest over the account receivables, and factoring can be categorized as account receivable financing. Recently, electronic invoices are introduced for account receivables. Large companies must issue electronic promissory notes instead of paper notes. Korea Financial Telecommunications & Clearings Institute runs a system to issue, transfer and collect electronic invoices. Each commercial bank runs its own system to create security over account receivables through electronic invoices. Usually such financing is recourse basis. Pooling of account receivables can be used as security. Such a pool can also be transferred through sale. It is not clear how the court would recognize such transaction when the pool contains future receivables, especially in case of insolvency. Securitization of account receivables is widely used as a statute (Asset-Backed Securitization Act) allows registered securitization to enjoy certain benefit. Non-registered securitization is used by originators who does not qualify for registration or small-size funding.

It is well known that Shareholder Resolution lawsuits(hereinafter "SR Lawsuits) serve as an important remedy in civil law jurisdictions. The rules on SR lawsuits, however, vary widely even among civil law countries such as Korea, Japan and Germany. Those rules are not identical between Germany and Korea. The purpose of this paper is to examine the law of SR lawsuits in Korea in comparison with German law and from a broader comparative perspective. This paper proceeds as follows. First, to set a stage for our discussion of SR lawsuits in Korea, we set forth a short sketch on historical development of the rules of SR lawsuits in Germany, Japan, and Korea, especially focusing on the grounds for three types of SR lawsuits; rescission lawsuits, nullity lawsuits, and non-existent lawsuits(II). Second, we then discuss some of the salient features of German law on SR lawsuits in comparison with Korean law(III). Finally, we conclude with a few remarks about revision of rule of SR lawsuits in Korea (VII). As for a dividing line between rescission and nullity lawsuits, we want to make one observation. In Korea, to distinguish between nullity and rescission lawsuits based on the nature of defects as in Korea is certainly straightforward and easy to implement. A weakness of this approach lies in its lack of flexibility. A procedure defect, however, is less problematic in terms of rigidity because it may lead to an non-existence law suit if it is regarded as too serious. On the other hand, rigidity may matter in the case of substance defect. If the substance defect involved is not so material, it may be better to treat them as a ground for rescission, which is subject to requirements such as statute of limitation and discretionary dismissal. It may be better for Korea to follow the German approach in this respect by treating a substance defect as a ground for rescission, if the law alleged to be violated relates to the interest of minority shareholders, rather than that of third parties or the general public. Under this new approach, violation of the principle of equality of shareholders, for example, is to constitute a ground for rescission, rather than nullity.

The activist hedge fund Elliott Associates opposed the merger because the offer price undervalued the company. Elliott Associates said the sale of Samsung``s common treasury shares was deeply alarming and intentionally diluted the voting rights and the value attributable to shareholders. The Seoul High Court has rejected an attempt by Elliott Associates to overturn a merger between Samsung and Cheil Industries. In finance, valuation of enterprise is the process of estimating what something is worth. The minority shareholders should be fairly treated in merger between listed companies. Measuring fair market value is important to deal fairy minority shareholders. This paper explores what is the best criterion for calculating fair rate of merger. This article examines the rate of merger between listed companies. It also investigates the Comments on the Seoul High Court``s decision.

Recently Daewoo Shipbuilding & Marine Engineering (DSME) reported an operating loss of 3 trillion won, shifting from an operating profit of 183 billion won a year earlier. This incident has triggered a debate on the appropriateness of company audits. The International Auditing and Assurance Standards Board (IAASB) introduced the New and Revised Auditor``s Reporting Standards on March 2015 in order to enhance auditor reporting. Enhancing auditor reporting is viewed as critical to the perceived value of the financial statement audit and thus to the continued relevance of the auditing profession. IAASB explains that the new and revised Auditor Reporting Standards lay the foundation for the future of global auditor reporting and improved auditor communications. Among the new and revised Auditor Reporting Standards, the International Standard on Auditing (ISA) 701 deals with the auditor``s responsibility to communicate key audit matters (KAM) in the auditor``s report. The purpose of communicating KMA is to enhance the communicative value of the auditor``s report by providing greater transparency about the audit that was performed. Even though the main aim of KAM is providing greater transparency, it may cause the ambiguity of the nature and scope of the auditors`` legal responsibilities with respect to KAM. This article analyses the IAASB``s New and Revised Auditor Reporting Standards, expecially reporting KAM, and the legal liability concerns for auditors. This article argues that Korea needs to supplement the legal liabilities system of auditors especially to the third party that is inadequate before the implementation of the new ISA 701. First, the practical guidelines of the ISA 701 should be in detail for preventing ambiguity of criteria of duty of care. Second, The concept and the scope of those charged with governance should be clarified in the Korean legal system in order that the auditors can communicate the right institution for deciding KAM during auditing. Third, concerning the sensitive matters the auditors should not be liable because of the confidentiality obligation.