161 / 521
Art. 27 CMB further states that when the right to squeeze-out is
born, the minority shareholder shall also have the right to exit the com-
pany. Accordingly, minority shareholders may, within a time period to
be determined by the CMB, request that the majority shareholders,
who have the right to squeeze-out, to purchase their shares at a fair
value.
Thus, the squeeze-out right of a majority, and the sell-out right of
a minority, is regulated under the same provision.
The said article expressly states that Art. 208 TCC, which is among
the provisions governing group companies, and regulates the squeeze-
out right of the controlling shareholders, shall not apply to public com-
panies. This provision governs the right of a mother company to
squeeze-out the minority in a subsidiary company causing disturbance
and trouble. The legislative justification of the CML states that both
provisions have a similar nature, and that the CML introduces a spe-
cific provision for specific cases that necessitate this exception to the
TCC.
Art. 27 CML has left the application of this provision to the CMB
regulations. Below, the provisions of the Communiqué are analyzed.
The Provisions of the Communiqué
The Communiqué regulates when the squeeze-out and sell-out
rights arise, how these rights shall be exercised, the price for exercis-
ing these rights, and other miscellaneous matters.
Birth of the Squeeze-out and Sell-out Rights
In the event that a shareholder holds at least 98% of the voting
rights of a company through a share purchase offer or otherwise, or if
the controlling shareholder already satisfying this threshold makes an
additional share purchase, it shall have the right to squeeze-out other
shareholders. Once the squeeze-out right is born, the remaining minor-
ity shareholders shall have the right to sell-out their shares. The per-
centage of votes was regulated as 95% under the Former Communiqué.
Evidently Art. 4 of the Communiqué sets a higher threshold.
Notwithstanding, pursuant to the provisional Art. 3, the threshold nec-
essary for the exercise of the squeeze-out and sell-out rights shall be
CAPITAL MARKETS LAW
145