South Korean ruling party legislators have put forward a proposal to broaden corporate M&A disclosure requirements, marking the latest push to strengthen minority shareholder protections and close the persistent valuation discount that has long weighed on the country's equity markets.

A group of 11 lawmakers, including Oh Gi Hyoung who chairs the National Assembly's special committee on the so-called "Korea discount," submitted an amendment to the Capital Markets Act on Thursday, according to a statement from the lawmaker's office. The proposed revision targets mergers and acquisitions involving listed companies.

Under the amendment, the board of a target company would be required to publish an independent opinion on any takeover bid, clearly stating whether the offer serves the interests of all shareholders. The measure would also expand mandatory disclosure obligations beyond asset-related transactions and management decisions to encompass any corporate action that could materially affect shareholder rights.

This would bring all M&A proposals with potential impact on shareholder interests under the compulsory disclosure framework. The "Korea discount" refers to the chronically lower valuations of South Korean listed companies relative to global peers, a gap widely attributed to weak corporate governance and the dominance of family-controlled conglomerates known as chaebols.

Although the benchmark Kospi index has climbed more than 50% this year, valuation levels still trail comparable markets such as Taiwan and Japan, underscoring the gap policymakers are working to close. The reform effort forms a key pillar of President Lee Jae Myung's broader corporate governance overhaul, with the administration and ruling party treating improved governance and higher shareholder returns as central to re-rating the stock market.

Last year, the National Assembly passed landmark reforms that expanded company directors' fiduciary duties to cover all shareholders, requiring directors to protect the interests of every investor equally. Oh said Korea's M&A market has so far failed to unlock the potential of undervalued companies, which is precisely the problem the amendment seeks to address.

"This legislative revision is expected to contribute to investor protection and efforts to resolve the Korea discount by strengthening board responsibility in M&A processes and enhancing information transparency," Oh said in the statement.