Shinsegae Food Inc - to cancel 32.6 bln won worth of treasury shares

Shinsegae Food Inc. has announced plans to cancel treasury shares valued at 32.6 billion won, aligning with broader corporate governance reforms in South Korea aimed at enhancing shareholder value. The move is part of a growing trend among major conglomerates, including Samsung Electronics and SK Inc., which have collectively committed to canceling over 20.8 trillion won in treasury shares as part of their compliance with the revised Commercial Act. The new law, effective since March 6, mandates that companies cancel treasury shares within 18 months, shifting away from using such holdings as a control mechanism and toward policies that improve capital efficiency and shareholder returns.

The cancellation of treasury shares typically increases earnings per share and return on equity, metrics that are critical for attracting global investors who have historically discounted Korean equities due to governance concerns. Shinsegae Food’s decision reflects the momentum behind the government’s “Kospi 5000” initiative, which seeks to close the valuation gap between Korean firms and their global counterparts. As companies across the Kospi prepare for annual general meetings, the focus on capital allocation and board independence is expected to intensify, with investors closely monitoring how firms balance governance improvements with operational flexibility.