President Lee Jae-myung (이재명) reaffirmed capital market normalisation as the government’s firm policy direction. He said the government would swiftly remove financially weak and low-performing companies from the Kosdaq market and respond strictly to unfair trading.

Lee made the remarks at a capital market policy meeting on Nov. 13 at the Korea Exchange in Yeouido, Seoul, under the theme "A trusted capital market, asking on the ground and finding answers." He said, "Our government’s will and policy on capital market reform have once again been put to the test," adding, "There is no room for doubt that capital market normalisation is our government’s firm policy direction."

Lee said South Korea’s stock market is undervalued compared with domestic companies’ technological capabilities and industrial competitiveness.

"It is sad and very unreasonable abnormality for stocks to be undervalued because they are Korean companies and because they are listed on the Korean stock market," he said. "Normalising the abnormal is a core task of our government," he added.

He cited "restoring trust" as a key task for capital market normalisation.

Lee referred to investor concerns about stock price manipulation, controlling shareholders’ abuse of management rights and duplicate listings. He said it is important to create an environment that market participants can predict rationally.

He also reaffirmed plans to strengthen enforcement against unfair trading.

"We have created various systems to correct unfair trading practices and controlling shareholders’ abuse of management rights," Lee said. "I have also issued separate instructions to the Serious Crimes Investigation Office to strictly crack down on unfair acts in the financial market," he added.

Lee also mentioned the so-called practice of "pressing down" share prices, in which companies intentionally keep share prices low to reduce inheritance tax burdens.

Lee said there are still many companies valued below their book value. He pointed to market suspicions that companies manage share prices to be low in order to reduce the tax burden during inheritance.

Lee said a mandatory tender offer system should consider both protecting minority shareholders and revitalising the M&A market.

"We must give minority shareholders a fair opportunity, but if we get it wrong, we have to consider at the same time whether it could become an obstacle that blocks M&A," Lee said.

He also stressed the need for structural reform of the Kosdaq market.

"We must carry out Kosdaq market reform and expand a stable investment base," Lee said. "Financially weak companies or low-performing companies must be swiftly exited by properly applying delisting requirements," he added.

The government plans to continue capital market reform, focusing on boosting corporate value, cracking down on unfair trading, structural reform of the Kosdaq market and expanding the long-term investment base.