earticle

영어

Cross-ownership is a method of reinforcing business relationships by owning stock in the companies with which a given company does business. Cross-ownership results when a company owns shares of another company that already holds shares of the company. The vices of cross-ownership include the fictitious increase of capital of the corporation, the control by the incumbent directors without any contribution, and the enhancement of concentration of economic power. Almost every country adapts some regulations over cross-ownership by prohibiting cross-ownership or eliminating the voting rights of cross-owned shares.
Record date established by an issuer of a security for the purpose of determining the holders who are entitled to receive a dividend or distribution. Record date also may be established for entitlement to vote or to receive notice of meeting. If such a record date has been fixed, the corporation must prepare a list of shareholders entitled to vote as of such record date. Only a shareholder whose name appears on such list of shareholders is entitled by law to vote. Transferees of shares acquired prior to the meeting but whose name does not appear on the shareholder list will no longer be entitled by law to vote, even if they produce evidence of ownership in timely fashion prior to the meeting.
This article examines function and roles of the cross-ownership and its relationship with record date by reviewing the case rendered on Jan. 30, 2009 in Supreme Court of Korea (Supreme Court of Korea 2009. 1. 30. 2006da31269 Judgement). Especially this article focus on the meaning of cross-ownership and its relationship with record date in Korean judicial system.
This article is organized in four parts. Part Ⅰoverview the general legal issues which will be raised in next sections. Part Ⅱ described the general description of the Case. Part Ⅲ examines the functions and roles of the cross-ownership and its relationship with record date in the meaning of Korean laws, especially when is the time whether the shares subsidiary have falls under meaning of cross-ownership under the article 369(3) of Korean Commercia Act. Part Ⅳ provides the comprehensive analysis to the case and the direction for the relationship between cross-ownership and record date in Korea.