Importing Hazardous Substances from the United States?: The Poison Pill in Japan and Korea

Abstract

The authors were motivated to write this article by South Korea’s steps to amend its corporate law to permit the use of the shareholder rights plan (poison pill). Poison pills are permitted in some of the world’s most sophisticated economies, and they have engendered strong opinions and changed the face of corporate law in the most well-established of jurisdictions. This article first looks back at the poison pill’s history in the United States and Japan, highlighting the advances and setbacks that might have predictive value for Korea. To accomplish this, we borrow a framework from Ronald Gilson and then look at case law precedent, existing and proposed legislation, strategies for the regulation and deployment of poison pills, and parties available to police its use. This article goes on to consider how a transplant of the poison pill doctrine into Korean M&A law could play out; focusing less on predicting the outcome and more on identifying the key success factors and potential pitfalls, and highlighting the importance of ongoing corporate governance reform.

Keywords: corporate governance, takeover, poison pill, Commercial Code, Bulldog case, Livedoor, Chaebol

JEL Classification: G34, G38, K22