Fair Trade Commission-Korea Corporate Governance Service Academic Forum
Professor Shin Young-soo of Kyungpook National University: "No grounds to limit the controlling shareholder to domestic nationals"
[Sejong=Asia Economy Reporter Joo Sang-don] At the academic forum jointly hosted by the Fair Trade Commission and the Korea Corporate Governance Service on the 22nd, a claim was made that "considering the control over the relevant corporate group, if necessary, even foreigners should be designated as the same person (controlling shareholder)." This statement was aimed at Coupang, which was designated as a 'large corporation without a controlling shareholder' in May this year.
On the 22nd, Professor Shin Young-soo of Kyungpook National University School of Law emphasized at the academic forum titled 'Policy Directions for Large Corporate Groups after the Comprehensive Revision of the Fair Trade Act,' jointly hosted by the Fair Trade Commission and the Korea Corporate Governance Service at COEX, Seoul, that "there is no basis in the Fair Trade Act to limit the same person to domestic nationals."
Professor Shin said, "The blind spots raised in the recent Coupang case need to be supplemented," adding, "Considering the domestic sales ratio of the corporate group, the domestic residence status of the same person, and the degree of control exercised over domestic affiliated companies, if necessary, even foreigners should be designated as the same person."
Regarding the scope of persons related to the same person, Professor Shin proposed, "It is time to seek alternatives by comparing the practical benefits of regulation and the inevitability of imposing obligations on companies," suggesting, "Realistically, the scope of relatives could be relaxed to 'within the fourth degree of kinship,' and the scope of in-laws to 'lineal ascendants and descendants of the spouse,' including those in de facto marital relationships with the spouse."
At the forum, there was also a claim that, separate from the ESG (Environment, Social, Governance) evaluations conducted at the corporate level, it is necessary to systematically analyze and evaluate governance differences among corporate groups.
Kim Hyung-seok, a researcher at the Korea Corporate Governance Service, emphasized, "There are differences among corporate groups in the frequency and scale of principal-agent problems caused by controlling shareholders and their families," and stressed, "Since corporate groups are a single economic entity, it is necessary to develop a new governance evaluation method rather than simply averaging governance at the corporate level."
Meanwhile, Chairman Cho Sung-wook of the Fair Trade Commission said in his congratulatory remarks, "'Improving corporate governance and establishing a fair market order' are the foundation of a fair economy," adding, "With the enforcement of the fully revised Fair Trade Act scheduled for December this year, transparency and accountability in corporate governance will be further enhanced."
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