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Conclusion
The Communiqué provides for the principles and procedures of
exercise of the squeeze-out and sell-out rights in public companies that
is regulated for the first time under the CML. This right grants con-
trolling shareholders, who hold at least 98% of the voting rights in a
public company, to request the cancellation of the minority shares, and
the issuance of new shares to be delivered to the controlling share-
holder. On the other hand, the minority shareholders shall also have the
right to request the controlling shareholder to purchase their minority
shares of the controlling shareholder.
Contrary to the Former Communiqué, the fact that a shareholder
obtains control through reaching the threshold set under the
Communiqué or makes additional share purchases while already exer-
cising this control shall primarily give rise to the sell-out rights of the
minority shareholders. Only after the three month period when the sell-
out right may be exercised lapses will the controlling shareholder be
entitled to exercise its squeeze-out right These rights grant the minori-
ty the right to no longer be bound by the decisions adopted in the rel-
evant company, and the controlling shareholder the right to full control
over the company.
The price to be paid when the squeeze-out or sell-out rights are
exercised are regulated separately and in detail under the Communiqué.
The price to be paid for the exercise of the sell-out right, differing from
the price to be paid for exercising the squeeze-out right, shall be
through comparing values calculated under numerous methods, and
applying the highest value.
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NEWSLETTER 2014