People Power Party 'Turbulence'... "Risk of Leaving Companies as Prey" vs "Resistance to Reform"

Veteran Four-Term Lawmaker Kim Gi-hyeon Says "No to Corporate Control Law" via Facebook
Business Leaders Visit People Power Party Daily to Appeal

[Image source=Yonhap News]

[Asia Economy Reporters Park Cheol-eung, Lee Chang-hwan, Lee Min-woo] Opposition within the People Power Party (PPP) has surfaced regarding the 'Fair Economy 3 Acts' and other economic democratization bills. The bills had been gaining momentum with the support of Kim Jong-in, the PPP Emergency Committee Chairman, aligned with the ruling party's will, but now intense debates within the PPP are expected to escalate.

Kim Ki-hyun, a four-term senior PPP lawmaker, stated on Facebook on the 23rd, "These laws must not become 'corporate takeover laws' wielded by power," adding, "'Fair Economy' and 'Economic Democratization' are undoubtedly valuable goals to pursue, but there are parts of these three laws that are hard to accept. They contain a mix of provisions that do not align with global standards or appear as Galapagos-style regulations." This is the most direct expression of internal opposition voiced so far.

He cited the case of the separate appointment of audit committee members included in the amendment to the Commercial Act. Kim said, "We cannot ignore the risk of leaving sound domestic companies vulnerable to predatory corporate raiders or foreign speculative capital. The risk of having corporate trade secrets or advanced core technologies stolen must also be considered."

Regarding the multiple derivative lawsuit system, he said, "While it has the advantage of making governance transparent and correcting unfairness, we must also consider concerns that it could become easy prey for corporate raiders disguised as civic groups." Kim also noted, "The complaints from companies about threats to management rights from hedge funds or foreign speculative capital aiming for short-term profits should not be dismissed as mere exaggeration."

The day before, Chairman Kim Jong-in commented on the internal opposition, saying, "Honestly, I don't know if they are discussing the issue based on understanding and awareness or just reflecting what they hear from outside." This was interpreted as a kind of criticism suggesting that opposition arguments from the business community are being repeated without a clear understanding of economic democratization, which is Kim's core belief.

Seong Il-jong, the opposition whip of the National Assembly's Political Affairs Committee and a PPP lawmaker, appeared on KBS Radio that day, saying, "Some resistance is inevitable when implementing reforms," and added, "Regarding issues like private gain and preferential treatment in business transactions, we need to provide a ladder of hope that nurtures small businesses into medium-sized enterprises and medium-sized enterprises into large corporations." He expressed agreement with the broader framework.

Companies are suffering in silence. Despite visits to the National Assembly by economic organizations and individual companies, there seems to be no clear progress. A company official lamented, "If the bill is amended, companies already struggling due to COVID-19 will face even greater difficulties," adding, "Even with economic organization heads explaining the situation to the National Assembly multiple times, the overall trend has not changed significantly."

That afternoon, Sohn Kyung-shik, Chairman of the Korea Employers Federation, Jung Goo-yong, Chairman of the Korea Listed Companies Association, Kang Ho-gap, Chairman of the Korea Federation of Medium-sized Enterprises, and Seo Byung-moon, Senior Vice Chairman of the Korea Federation of Small and Medium Business, are scheduled to meet with Chairman Kim Jong-in. Afterwards, Joo Ho-young, the PPP floor leader, plans to meet with them as well to urge a response plan to the 'Corporate Regulation 3 Acts.'