[Yeouido Interview] Lawmaker Lee Yong-woo, Ranked No.1 in Bill Passage Rate, Explains Why He Fights for the 'Gaemi'

"Small Shareholders Should Not Be Forced to Bear One-Sided Sacrifices for Capital Market Growth"
Small Shareholders Are Providers of Capital, Companies Are Demanders
Focus on Amendments to Capital Market Act and Commercial Act

Lee Yong-woo, Member of the Democratic Party of Korea./Photo by Dong-joo Yoon doso7@

[Asia Economy Reporter Naju-seok] Every time the legislative performance of the National Assembly is analyzed, Lee Yong-woo, a member of the Democratic Party of Korea, stands out remarkably. As of the 7th in the 21st National Assembly, Lee proposed 118 bills, of which 20 were passed. This means that one out of every six bills passed the plenary session. This compares to only one out of nine bills (1,595 out of 17,579 bills) passed during the same period in the National Assembly. Lee's bill passage rate was ranked first in the first half of the National Assembly.

Moreover, 19 out of the 20 bills were passed in their original form. The fact that they passed without amendments through the relevant standing committees and the Legislation and Judiciary Committee is evaluated as demonstrating thorough preparation and legislative capability. As a member of the National Assembly's Political Affairs Committee, Lee proposed bills related to finance, capital markets, and personal information, and also drew public attention by introducing bills representing "small shareholders." A representative example is the Capital Markets and Financial Investment Services Act (Capital Markets Act) that grants shareholders opposing physical division the right to request stock purchase, aimed at preventing small shareholders from suffering losses due to the so-called "split listing," where a listed company separates a promising business division into a separate corporation and then lists it again, causing the parent company's stock price to fall.

In March this year, Lee also proposed an amendment to the Commercial Act to add "the interests of shareholders" to the duty of loyalty of directors. The amendment includes provisions that directors must faithfully perform their duties for the proportional interests of shareholders and the company in relation to their responsibilities.

In an interview with Asia Economy, when asked about his future legislative focus, Lee said, "Many problems have been revealed regarding physical division, and policy directions have changed," adding, "I will focus on legislating this area and imposing proportional duties to shareholders in the directors' duty of care (the duty of a good manager) as outlined in the amendment to the Commercial Act."

He explained, "If the bill is amended, the capital market will change in a different way. When a company undergoes mergers and acquisitions (M&A), it could become problematic if only the party with management rights (excluding small shareholders) receives a premium. Also, the controversy over physical division, which sparked the split listing debate, could lead directors to face lawsuits, making them consider the interests of small shareholders."

When asked why he focuses on small shareholder issues, Lee revealed his philosophy that protecting small shareholders is ultimately the way for the capital market to thrive. He pointed out, "When Korean companies raise capital through stocks, the company is the demander, and the supplier is the investor. For the market to exist, suppliers and demanders must be treated equally, but instead, one-sided sacrifices are being forced." He continued, "The most important thing for investors is to accurately understand the company's details. If disclosures are done well and information is accurately conveyed, the market will be able to make its own choices."

Lee sees an increased likelihood of passage for amendments to the Commercial Act and the Capital Markets Act. He expressed optimism, saying, "The number of people investing in stocks and the capital market has increased. In the last presidential election, each candidate presented pledges regarding the capital market, which shows that policies in this area have become important compared to the past. I believe that if we keep addressing this issue, there will be fruitful results."