South Korea’s largest institutional investor National Pension Service (NPS) will seek to file a lawsuit against companies on the risk of losing money as part of efforts to take more stern actions to protect investors rights and shareholder value.

The NPS and the Ministry of Health and Welfare governing the pension fund on Sunday released new guidelines aimed to enhance their responsibility in protecting investors’ money. They decided to go more aggressive in suing a company if they conclude the lawsuit would help enhance shareholders’ value in the long run, after considering various factors including chance of winning the case, actual benefit of the litigation and companies’ own measures to keep profits.

The fund will also help shareholders to bring a damage suit against companies or related people if they incur significant losses on stocks or bonds which the fund made investments in.

The NPS decided to disclose its every decision made at the top decision-making body the Fund Management Committee regarding activities as a fiduciary within 14 days at its website.

The nation’s top institutional player with 635 trillion won ($564 billion) in assets under management has been gradually enhancing its shareholder rights since it in July adopted a stewardship code, a set of guidelines to help investors to push for better governance and higher shareholder returns in companies they invest in. As a follower-up measure, it in October formed a 14-member outside advisory committee with two specific duties of deciding the areas and scope of exercising voting rights and keeping oversight on capital investments.

These are considered all positive changes in the NPS, which has long been regarded as a white knight that large companies can rely on for protection against external threats.

By Yoo Joon-ho and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]