This paper offers a new interpretative analysis of disguised capitalization (i.e, disguising payments for share subscriptions by withdrawing payments immediately after completing whole share issuance procedure), in terms of share subscription under the Korean Commercial Code (hereafter, KCC). There was a widespread tendency to evade payment for share subscription upon establishment of a company due to the minimum capital requirement before 2009. The minimum capital requirement was abolished in an amendment to the KCC in 2009, and afterwards demand for disguised capitalization also decreased. Traditional approaches have simply assumed that in the incorporation process, any fraudulent payment for share subscription would be invalid, rendering the disguised capitalization ineffective, since it results in a lack of capital to the corresponding newly issued shares (this is contrary to the so-called capital faithfulness principle of corporate law). In addition, many scholars advocating the traditional view have proposed to resolve this problem by having the subscribers repay the capital contribution or having the promoters pay any compensation against any losses incurred. They offer no further explanation of disguised capitalization occurring after establishment of a company. The Korean Supreme Court however, has consistently held the position that payments of share subscriptions are valid and effective, regardless of whether the payments are disguised, contrary to these traditional views, on the grounds that real money is transferred to the company`s account, as far as the civil and administrative cases are concerned. Nevertheless, solid precedents exist in Korean court cases in which share subscriptions by disguised payments have been treated as null and void based on criminal laws, if the criminal courts have mandated criminal sanctions against violators of these prohibitions against fraudulent share subscription payments. This paper argues in favor of the civil court`s positions regarding the effectiveness of share subscriptions from a legal and economic viewpoint. This paper examines legal issues arising from the traditional views and the between interpretations from civil and criminal courts. Finally, this paper also proposes the possibility of treating such disguised capitalization as a type of securities fraud that is defined as an unfair security transactions under Article 178 of the Financial Investment Services and Capital Markets Act (hereafter, FSCMA). This would be regulation of the Korean stock exchange market, which would provide for the financial authority`s investigation and criminal proceedings by the Korean Prosecutors` Office. This paper also describes similar cases which bring into question such disguised payments in relation to share subscriptions in Japan, and the Japan Securities and Exchange Surveillance Commission deals with such cases as unfair financial act, after they have been investigated and dealt with by the Japanese Prosecutors` Office as securities fraud.