Mirae Asset Global Investment to become de facto holding company

South Korea’s Mirae Asset Financial Group is readying to transform its de facto holding company to Mirae Asset Global Investment Co. from Mirae Asset Capital Co. in a move to stabilize the group’s governance structure and management control before the upcoming merger between Mirae Asset Daewoo Co. and Mirae Asset Securities Co.

According to financial industry sources on Monday, Mirae Asset Capital is planning to issue new shares worth 250 billion won ($226 million) to its affiliate Mirae Asset Global Investment. A final decision on the new share issuance plan will be voted on during a temporary shareholders meeting on September 19. Following the new share issuance, Mirae Asset Global Investment will become the second largest stakeholder of Mirae Asset Capital with 28.9 percent shares, following the financial group’s Chairman Park Hyun-joo with 34.6 percent shares.

The recapitalization through new share issuance will convert the group’s holding structure into a new form with Mirae Asset Global Investment acting as the de facto company over Mirae Asset Capital and other subsidiaries of the group including its securities and life insurance units.

Prior to the financial conglomerate’s decision to restructure the group through new share issuance, rumors had been circulating that Mirae Asset Capital would sell off its interests in its affiliates Mirae Asset Daewoo Co. or Mirae Asset Securities Co. to meet the country’s financial regulations revised in March.

The group, however, has decided to use funds available at Mirae Asset Global Investment to invest in Mirae Asset Capital to fulfill the new investment ratio guideline under the new financial regulations instead of investing to buy overseas assets or expand its global network, said a Mirae Asset Global Investment official who asked to be unnamed. As of the end of June, Mirae Asset Global Investment had equity capital of 1.09 trillion won.

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