South Korea has stepped up restrictions on the purchase of stakes in local communications companies in an effort to help them stave off foreign hostile takeover bids, officials said Friday.
Under a revised law, anyone who wants to buy more than a 15 percent stake or become a controlling shareholder in local basic telecommunications service providers will be required to get approval from the information minister.
Basic service carriers refer to firms that offer communications services such as fixed-line, mobile telephony and the Internet by using their own infrastructure networks.
On Thursday, the National Assembly passed an amendment to the electric communications law. The revision will likely go into effect in the second half of next year at the latest, the officials said.
The revised law is widely expected to help local communications firms fend off hostile takeover attempts by foreign speculative funds.
"The ministry did not reflect that factor in preparing the revision but I believe that the toughened requirement will help local firms shield themselves from unwanted takeover bids," an official at the Ministry of Information and Communication said, declining to be named.
Currently, foreigners are not allowed to buy more than 49 percent in local communications service providers. But the U.S.,
South Korea's free trade negotiating partner, is demanding that the investment restriction be lifted or eased.
Seoul, Dec. 8 (Yonhap News)
S. Korea toughens rules on stake buys in telecom firms |
