Opposition Forms Economic Reform Lawmakers' Group... "Commercial Act Must Be Amended to Improve Corporate Governance"

'Samsung C&T, LG Chem, SK Innovation, Doosan Bobcat CEOs to be Witnesses at National Assembly Audit
Push for Expansion of Cumulative Voting System and Restrictions on Controlling Shareholders' Voting Rights in Case of Conflicts of Interest'

Opposition lawmakers have formed the 'Economic Reform Lawmakers' Group' to promote economic democratization. They announced that starting with summoning corporate executives who infringed on minority shareholders' interests as witnesses during this year's National Assembly audit to hold them accountable, they will push for amendments to the Commercial Act that include expanding directors' fiduciary duties to shareholders.

On the 24th, Democratic Party lawmakers Oh Ki-hyung, Kim Nam-geun, and Park Sang-hyuk, Jo Gyu-geun from the Innovation Party, and Han Chang-min from the Social Democratic Party held a press conference at the National Assembly, stating, "Lawmakers who share the will for economic democratization have come together to form the 'Economic Reform Lawmakers' Group.' Our Constitution presents 'economic democratization' as a national goal to establish a just social order in the economic sphere. To achieve this constitutional goal, lawmakers from various parties have united to jointly identify necessary tasks at the National Assembly level, discuss them, and respond collectively." In addition to those who appeared at the press conference, lawmakers Kim Nam-hee, Kim Seong-hwan, Kim Young-hwan, Kim Hyung-jung, Lee Kang-il, and Jeong Jun-ho from the Democratic Party, as well as Shin Jang-sik from the Innovation Party, are also participating in the group.

They proposed "'Amendment of the Company Act for the Advancement of Corporate Governance'" as the first legislative task of this regular session of the National Assembly. The lawmakers stated, "There have been repeated cases where the board of directors participates in decisions that maximize the interests of the largest shareholder (head of the group) while infringing on the interests of the general shareholders in situations of conflict of interest between the largest shareholder (head of the group) and general shareholders," citing examples such as the merger of Cheil Industries and Samsung C&T, LG Chem's physical division, governance restructuring of SK Group and Doosan Group, and cases like Shinseong Tongsang.

As a solution to this problem, they argued, "Directors' responsibilities must be strengthened, and measures such as expanding cumulative voting and restricting controlling shareholders' voting rights on conflict-of-interest agenda items should be implemented to achieve checks and balances in board composition." They also insisted, "In special cases such as mergers and divisions, mechanisms like majority voting by minority shareholders should be established to protect the interests of minority shareholders."

To address this issue, the lawmakers decided to actively utilize the National Assembly audit and other means. The Economic Reform Lawmakers' Group stated, "We will promote social discussions by summoning relevant parties as witnesses during this regular session's National Assembly audit," and added, "We must summon representatives from Samsung C&T, LG Chem, SK Innovation, Doosan Bobcat, and Shinseong Tongsang as witnesses to ask for their stance on the damages suffered by minority shareholders."