The Minute to Read (Weekend) series provides a quick overview of significant events in Korea from the week, conveniently condensed into a one-minute read. Here’s a recap of what happened this week: Jan. 20-24.
Former KDIC officer sentenced to 20 years for leaking secrets to China
A 50-year-old former civilian officer of the Korea Defense Intelligence Command (KDIC), identified as Mr. A, has been sentenced to 20 years in prison for leaking classified military information to Chinese intelligence over seven years. The leaked information included the identities of South Korea’s undercover operatives, known as “black agents.” The Court Martial of the Central Region in Yongsan, Seoul, delivered the verdict on Jan. 21, sentencing Mr. A to 20 years in prison, a fine of 1.2 billion won ($840,000), and a surcharge of 162.05 million won. In August 2023, the Ministry of National Defense’s prosecution team charged him with general treason under the Military Criminal Act, bribery, and violations of the Military Secrets Protection Act. During a December sentencing hearing, prosecutors sought a life sentence, an 800 million won fine, and the same surcharge.
The court found Mr. A guilty on all charges and highlighted the severity of his crimes. “As the leader of an intelligence operations team, the defendant leaked classified second-class military secrets, posing a serious threat to national security while pursuing financial compensation in violation of his duty to uphold integrity,” the court stated. “The leaked information included personal details of intelligence agents, endangering their lives and safety and undermining years of intelligence efforts.”
South Korea sharpens IPO and delisting rules for stronger market oversight
South Korean financial authorities are set to implement the most significant reforms in 16 years to tighten delisting criteria for companies on the Korea Composite Stock Price Index (KOSPI). The market capitalization threshold for delisting will increase by up to tenfold to enhance the credibility and efficiency of the capital market. By 2029, companies with a market capitalization below 50 billion won (approximately $34.9 million) or annual sales under $20.9 million will be gradually delisted. Companies receiving a “qualified,” “adverse,” or “disclaimer of opinion” audit for two consecutive years will face immediate removal from the KOSPI exchange.
The reforms also target initial public offerings (IPOs) to curb short-term trading by institutional investors. New rules will require these investors to hold IPO shares for longer periods, aiming to prevent demand spikes before listing and sharp price drops afterward. Announced on Jan. 21 during a joint seminar hosted by the Financial Services Commission (FSC), the Korea Exchange, and the Korea Financial Investment Association, these measures were introduced as part of broader efforts to strengthen the market. FSC Chairman Kim Byung-hwan highlighted the IPO market’s excessive focus on short-term profits and weak delisting rules, stating, “This reform represents a pivotal step toward enhancing the capital market.”
Daemyung Sono eyes management shake-up at T’way Air
Sono International, a subsidiary of Daemyung Sono Hospitality Group, South Korea’s leading resort company, is taking steps to secure management control of T’way Air, the country’s second-largest low-cost carrier (LCC). The company is also exploring a potential merger between T’way Air and Air Premia, another airline that holds shares. Through this move, Sono International aims to create a new airline offering short-, medium-, and long-haul routes, focusing on expanding its global presence and generating mutual growth opportunities with its hospitality business.
Despite its ambitions, Sono International currently holds the position of T’way Air’s second-largest shareholder, trailing behind T’way Holdings and Yerimdang, who maintain a lead of approximately three percentage points. This narrow margin raises the likelihood of a management dispute. Seo Jun-hyuk, chairman of Daemyung Sono Hospitality Group, highlighted the company’s strategy to enhance customer satisfaction and shareholder value. “Leveraging our extensive domestic and international infrastructure, we plan to develop innovative products and improve customer service at T’way Air,” Seo said. “Our entry into the aviation industry will serve as a new growth engine for Daemyung Sono, driving us toward becoming a global leader.”
Hyundai EVs lose U.S. tax credits over battery sourcing rules
Three Hyundai electric vehicle (EV) models have been excluded from eligibility for up to $7,500 in tax credits under the United States Inflation Reduction Act (IRA). Despite meeting the final assembly requirement with the completion of its Georgia factory in October, Hyundai’s disqualification is reportedly due to issues with battery component and critical mineral sourcing. On Jan. 20, the U.S. Department of Energy (DOE) announced that the Ioniq 5, Ioniq 9, and Genesis Electrified GV70 were removed from the subsidy list. These models were among five Hyundai Group EVs initially eligible for the credits, while two Kia models, the EV6 and EV9, remain qualified. The IRA tax credits are granted only to EVs assembled in the United States that meet strict battery component and mineral sourcing requirements. Specifically, battery materials must not originate from Foreign Entities of Concern (FEOC), including China and Russia. Hyundai’s vehicles initially qualified by meeting U.S. assembly standards but failed to comply with sourcing requirements for battery parts and minerals.
Korea Zinc blocks Young Poong’s voting rights and retains management control
Korea Zinc Chairman Choi Yun-beom successfully defended the company’s management rights during an extraordinary shareholders’ meeting held on Jan. 23. A day earlier, on Jan. 22, Korea Zinc acquired a 10.33% stake in its largest shareholder, Young Poong, through its Australian subsidiary SMC, effectively neutralizing Young Poong’s 25.42% voting rights in Korea Zinc. Under South Korean commercial law, when two companies each hold more than 10% of the other’s shares, neither company is permitted to exercise voting rights on those shares.
During the shareholders’ meeting, Korea Zinc blocked Young Poong’s voting rights and successfully passed all its proposed agenda items. These included the adoption of cumulative voting, the appointment of new directors, and the introduction of a cap on the number of directors. Conversely, none of the agenda items proposed by MBK Partners and Young Poong, which are attempting to take over Korea Zinc’s management, received approval. Despite the outcome, the MBK-Young Poong alliance plans to file a lawsuit, arguing that the restriction of Young Poong’s voting rights was unlawful. The court’s ruling on this matter could potentially reshape the ongoing battle for management control.
13-year dispute over stolen Goryeo Buddha statue ends with return to Japan
A 14th-century bronze Buddha statue from Korea’s Goryeo Dynasty, stolen from Kannon Temple on Japan’s Tsushima Island in 2012 by a South Korean theft ring, will be returned to the temple on Jan. 24, ending a 13-year dispute. According to the Korea Heritage Service and the Jogye Order, Japanese representatives, including Kannon Temple’s former chief priest, will visit the National Research Institute of Cultural Heritage in Daejeon to reclaim the statue. Following a 100-day public exhibition at Buseok Temple in Seosan, the statue will be transferred to Japan in May. The theft ring smuggled two statues from Tsushima in 2012. A standing Amitabha Buddha statue was returned to Tsushima’s Kaijin Shrine in July 2015, as there were no ownership claims in South Korea. However, Buseok Temple claimed the seated Avalokitesvara Bodhisattva statue, citing an inscription inside that stated it was crafted at Buseok Temple in Seoju (modern-day Seosan) in 1330.
K-pop industry struggles amid falling album sales and export revenue
Concerns are rising in the K-pop market as a decade of steady growth has slowed. Physical album exports and sales, which had consistently expanded since 2015, experienced a notable deceleration last year. According to data from the Korea Customs Service on Jan. 19, physical album exports in 2024 totaled 423.8 billion won ($290.7 million), up just 0.55% from 421.5 billion won in 2023. Exports to Japan, the largest market for K-pop albums, fell 24.7% to 130.3 billion won. Combined with the United States (87.5 billion won) and China (86.8 billion won), these three markets accounted for 72.8% of total export revenue. A 76.4% recovery in exports to China, following the easing of Beijing’s restrictions on Korean content in 2023, partially offset the overall decline. The milestone of 100 million K-pop album sales achieved in 2023 ended after just one year. According to Circle Chart, operated by the Korea Music Content Association, physical album sales from January to December 2024 totaled 98.9 million units, a 17.7% drop from 120.2 million units in the previous year.
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