[Financial News] The 'anti-stock-price suppression bill' is expected to move forward in its original government form, despite the president's order for a full review. At its core, the bill seeks to revise the valuation method used when transferring undervalued listed shares to major shareholders. Depending on the criteria applied, it is also expected to affect the governance structure of holding companies with low price-to-book ratios, or PBR. According to the securities industry on the 29th, the Ministry of Economy and Finance plans to submit the bill to the State Council of South Korea on Sept. 1 without any changes. Although the president ordered a full review earlier this month, the government is proceeding without separate revisions. The main points of contention in the National Assembly's Tax Subcommittee are expected to be the scope of application and the criteria. The bill is designed to improve the valuation method to prevent major shareholders from reducing their tax burden by using low share prices when inheriting or gifting listed stocks. Low-PBR companies, whose corporate value is assessed below their net asset value, are being discussed as the main targets. The government's original draft targeted companies whose PBR hit a yearly low in 12 of the 13 non-public hearings. Separately, a public petition has also been filed calling for the net asset value to be used as the valuation floor at 80% of NAV when a stock trades below 80% of its net asset value. Ryu Jae-hyun, a researcher at Mirae Asset Securities, said, "How the target criteria are finalized will directly affect governance incentives at low-PBR holding companies, so we need to keep a close eye on the National Assembly's Tax Subcommittee discussions." Discount rates to net asset value at major holding companies remain high. As of that day, the average discount rate for the five major companies stood at 54.7%, down 0.2 percentage point from the previous week. Hanwha Group had the highest discount rate at 64.3%, followed by LS Group at 60.4%, CJ Group at 58.0%, HD Hyundai at 53.0%, and LG Group at 47.4%. In terms of upside to target prices, LS Group had the largest potential gain at 44.4%. Hanwha Group followed at 37.1%, while HD Hyundai stood at 28.4%, CJ Group at 27.2%, and LG Group at 20.4%. The market is closely watching the upcoming parliamentary debate. Even if the government submits the bill without changes, discussions over the criteria for determining the scope of application could continue. In particular, analysts say that for low-PBR holding companies, the bill's reach could alter incentives related to governance. A securities industry official said, "Holding-company discounts reflect a range of factors, including the value of subsidiaries, shareholder returns, and governance, so it is hard to say this bill alone will immediately narrow the discount rate." The official added, "However, if the system is finalized in a way that reduces the incentive to keep share prices low during inheritance and gifting, it could also affect how the market values low-PBR holding companies." [email protected] Choi Du-seon Reporter