FSS chief asks local firms to better protect shareholder interests

The chief of the financial watchdog called on local firms to better protect the interest of their shareholders Wednesday, reiterating the importance of the ongoing government-led corporate value-up program.

Lee Bok-hyun, right, head of the Financial Supervisory Service, speaks with Kim Eun-mee, president of Ewha Womans University, at a joint conference held at the school in Seoul on Tuesday. [YONHAP]

The chief of the financial watchdog called on local firms to better protect the interest of their shareholders Wednesday, reiterating the importance of the ongoing government-led corporate value-up program.

Lee Bok-hyun, head of the Financial Supervisory Service (FSS), insisted the government-led efforts to enhance the value of local businesses have somewhat paid off, citing the record net purchase of local stocks by foreign investors in the first half of the year.

Offshore investors net purchased 22.9 trillion won ($17.2 billion) worth of local shares in the first six months of the year, the highest amount since the country began compiling such data in 1988, the FSS said earlier.

"Still, there continue to be cases where local and foreign investors become disappointed by company decisions in the process of a merger or a public purchase that only benefit controlling shareholders," Lee said in a meeting with officials from financial think tanks on ways to improve corporate governance.

"There is a need to consider deeper and more realistic plans for improvement for us to win back the trust of investors and enhance the competitiveness of our capital market," he was quoted as saying during the meeting.

The corporate value-up program seeks to end the so-called Korea discount, where local stocks are valued lower than their fundamentals.

The FSS chief said the government has been continuously seeking various views of the academic, financial and business circles, as well as private investors for ways to end the decadeslong phenomenon and that Wednesday's meeting was part of such efforts.

Kim Byoung-hwan, head of the Financial Services Commission, also urged insurance firms to invest their funds in ways that can help improve the local economy.

"For the insurance industry to ensure its sustainable growth, it must first consider why the people's trust in the industry is so low, while it is called a dispute-prone industry," Kim said in a meeting with the heads of 10 local insurance firms and other related organizations.

Kim insisted that the "swift payment of insurance claims is the basis of insurance service."

He also stressed the need for the insurance firms to digitalize their insurance claim service by Oct. 25 as scheduled, a move aimed at simplifying the claims process for consumers, calling it a promise they made to their 40 million customers.

Wednesday's meeting was the third of its kind that Kim has held with various financial industries since he took office late last month, following his meetings with officials from banks and credit finance firms.

Yonhap