Dunamu and NAVER Stock Swap Faces Regulatory Challenges in South Korea

A stock swap transaction between Dunamu, the parent company of Upbit, and a subsidiary of South Korea's NAVER Corporation may encounter regulatory hurdles. Reports indicate that the transaction could conflict with shareholding limits set by the Fair Trade Act of South Korea. This act requires holding companies to maintain specific minimum and maximum shareholding ratios in their subsidiaries, which could complicate the governance structure if NAVER Pay transitions into a holding company in the future.

Under the Fair Trade Act, a holding company must own at least 30% of shares in listed subsidiaries and 50% in non-listed subsidiaries. For venture capital holding companies, the minimum requirement is 20%. The current situation is further complicated by ongoing discussions regarding South Korean virtual asset legislation, which aims to impose maximum shareholding limits for major shareholders of virtual asset exchanges. This measure is intended to mitigate control concentration and reduce the risk of conflicts of interest among shareholders.

As the regulatory landscape evolves, both Dunamu and NAVER will need to navigate these complexities to ensure compliance with South Korean laws while pursuing their business objectives.

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Source: KLEA News