전환사채의 규제에 대한 비판적 검토 - 콜옵션 및 리픽싱을 중심으로 -

Given that various options related to stock conversion have been granted when convertible bonds are issued, critics have pointed out that convertible bonds are often misused in unfairly expanding the shareholding of the largest shareholder and its specially related persons of listed companies, causing financial harm to existing shareholders. Accordingly, on October 27, 2021, the Financial Supervisory Commission(“FSC”) resolved on an amendment to the 「Regulations on Securities Issuance and Disclosures」 in relation to convertible bonds. As a result, if a listed company issues convertible bonds that grant call options to the largest shareholder and its specially related persons on or after December 1, 2021, (i) the company needs to disclose the person who exercises the call option and the number of shares converted by such exercise; (ii) the largest shareholder and its specially related persons can exercise their call options only up to their initial shareholding ratio at the time of issuance of convertible bonds; and (iii) if the conversion requirement for convertible bonds includes downward adjustment of conversion price when the stock price falls after their issuance (“Downward Refixing”), the conversion price must also be adjusted to what it was at the time of issuance when the stock price increases (“Upward Refixing”). It is expected that the said regulations would significantly prevent the largest shareholder and his/her specially related persons from expediently expanding their stakes or engaging in various unfair trading practices through exercising call options or Refixing. However, the larger the number of shares held by the largest shareholder or his/her specially related persons, the greater the exercisable limit of the call options becomes, as the largest shareholder and his/her specially related persons can exercise their call options up to their shareholding ratios at the time of issuance of convertible bonds pursuant to the said amendment. Therefore, in order to effectively avoid the unfair trade practices pointed out so far, it would be more effective to set an absolute limit so that the largest shareholder and his/her specially related persons can exercise call options only to a certain extent regardless of their shares at the time of issuance of convertible bonds. In addition, if the Upward Refixing becomes mandatory pursuant to the said amendment, the refixing loses its whole purpose – i.e., to induce stock conversion even when stock prices fall. It is because the issuers of convertible bond, as a result of the amendment, will have to bear higher interest rates than before, or it will become difficult for the issuers to raise funds through the issuance of convertible bonds. Therefore, it is more advisable to tighten the current regulation, by mandating the conversion price after adjustment for a decline in price to be higher than the current legal lower limit – i.e., 70% of the conversion price at the time of issuance – rather than imposing the Upward Refixing obligation.