The Korean market authorities have further strengthened takeover defences by introducing a five-day “cooling off period” when an investor acquires a stake of 5% or more in a listed company. The rule is effective from 29 March 2005.
The 5 % reporting rule specifies that when a reported investment purpose is changed to ‘management participation/acquisition’ from ‘simple investment’, the investor must report the change within five days, and will be banned from exercising voting rights and buying additional shares for five days from the reporting date. The cooling off period will be applied to all investors reporting the purpose of an investment as ‘management participation/acquisition