RaymondsIndex

Korea just gave minority investors a new tool, and it's worth understanding exactly what it can and cannot do. Under an amended Commercial Act, the duty of loyalty owed by company directors has been rewritten. Where the law once required directors to act faithfully "for the company," Article 382-3 now requires them to act for "the company and its shareholders ," and to treat all shareholders fairly. The shareholder-loyalty principle took force in 2025; the broader package — independent-director requirements (one-third of the board for large listed firms), a strengthened 3% voting cap, and the separate election of audit-committee members — phases in through July and September 2026. Alongside it, Korea moved to mandate cancellation of treasury shares, closing a mechanism long used by controlling families to entrench control with little direct ownership. This is a real shift. For the first time, a board that engineers a merger or a dilutive capital raise purely f...

Two take-privates closed within months of each other on opposite sides of the Sea of Japan. They used the same instrument. They produced opposite outcomes for the people who didn't sit at the table. In Korea, a private equity fund took the waste-management company Koentech private in mid-2025 at ₩9,000 per share. The fund assembled control through a tender offer, on-market purchases, and finally a comprehensive share swap. The tender offer fell short of plan — it secured about 20.2% — so the last resisting minority block, roughly 12.9% of the company, was forced out through the swap at that same ₩9,000. An independent valuation had called the price fair. Six months later, with no meaningful change in the business or its end-market, the fund moved to sell the company outright for a price in the mid-₩700 billion range — close to ₩15,000 per share, nearly double. Reporting estimated the squeezed-out minorities' stake carried roughly ₩40 billion of additional value they never rece...

The raid came after the stock had already moved. On May 28, 2026, prosecutors from the Seoul Southern District Prosecutors' Office executed search and seizure warrants at NH Investment & Securities and DI Dongil — a Korean industrial company listed on the KOSPI. The investigation targets an alleged market manipulation scheme in which more than one trillion Korean won was coordinated across dozens of accounts using artificial cross-trades. Prosecutors allege that the manipulation group used a minority shareholder activism campaign as cover, pressuring company management to enter a share buyback trust agreement while quietly managing the stock price behind the scenes. Retail investors, watching the price respond to what appeared to be governance pressure, bought in. They were the designed exit. The same week, across the Pacific On May 6, 2026, the U.S. Securities and Exchange Commission — alongside the Department of Justice — charged 21 individuals with a sprawling insider tr...

Introduction: The Survival Trade In South Korea, KOSDAQ delistings tripled over two years: 8 companies were removed from the market in 2023, rising to 20 in 2024 and 38 in 2025, according to Korea Exchange data cited in the Seoul Economic Daily (May 10, 2026). Regulators responded by raising the minimum market capitalization threshold from ₩4 billion to ₩15 billion in January 2026, with another increase to ₩20 billion scheduled for July. The result? A wave of “defensive M&A.” Listed Korean small-cap companies are acquiring businesses with stable revenue — not to build strategic value, but to pass the listing threshold. Kespion (079190), a communications antenna firm, acquired MBTB, an acne patch specialist, for ₩2.1 billion in January. Kespion had recorded operating losses of ₩5.4 billion in 2024 and ₩2.7 billion in 2025. At the time of acquisition, MBTB itself was unprofitable. As of late May, Kespion’s market cap sits at approximately ₩22.1 billion — barely above the ₩20 billio...

On May 22, 2026, a KOSDAQ-listed company called Hankook Advanced Materials (062970) approved a KRW 10 billion private convertible bond. Half of that issuance went to Specialty Investment Co., an entity confirmed to be a special-related party of the de facto controlling shareholder, Satoshi Holdings. The disclosed use of proceeds was a single line: "acquisition of securities of other companies." That single line is the entire window the minority shareholder has into where KRW 10 billion of newly created liability is about to go. This is not a unique case. It is a template. The Cash Governance Question When a company raises capital, three things can happen. The cash goes into operations — equipment, hiring, inventory, working capital. The cash goes into capital efficiency — buybacks, dividends, debt reduction. Or the cash goes into something that looks like neither — short-term financial products, related-party loans, "other securities" with no further specifi...

Introduction In 2025, Herbalife Korea posted ₩2.8 billion in net income. By most standards, that looks like a profitable year. But the company simultaneously paid ₩8 billion in dividends to its US parent — a payout ratio of 283.7%. Over three years, retained earnings fell from ₩43.9 billion to ₩14.9 billion. More than 30% of revenue left the Korean subsidiary as service fees. When asked thirteen direct questions about the structure behind these numbers, the company said nothing. This is not a unique story. It is a pattern. The CEI Question The Capital Efficiency Index (CEI) in RaymondsIndex asks a deceptively simple question: Is the capital being deployed by this company actually generating returns — and returning them to shareholders? A low ROIC is one signal. But CEI is designed to catch something more specific: situations where capital is configured to move out of the company rather than compound within it. This includes subsidiaries that consistently pay out more than they ea...