"Further Discussion Needed on Commercial Act Revision"
Financial Services Commission to Prepare General Shareholder Protection Measures Within the Year
Kim Byung-hwan, Chairman of the Financial Services Commission, is attending and speaking at the Economic Ministers' Meeting and the 1st Investment Activation Ministers' Meeting held at the Government Seoul Office in Jongno, Seoul on the 2nd.
Financial Services Commission Chairman Kim Byung-hwan said on the 30th, "I urge the National Assembly to reach a conclusion to abolish the Financial Investment Income Tax (FIIT) to end investors' worries and uncertainties."
Chairman Kim held a press briefing at the Government Seoul Office that morning and stated, "Although it is not under the jurisdiction of the National Assembly's Political Affairs Committee, the bill we earnestly hope for in November is the abolition of the Financial Investment Income Tax (FIIT)."
Chairman Kim previously held his first press briefing on the 44th day after his inauguration last month. He attracted attention by holding another press briefing 48 days later, as the Financial Services Commission chairman had not regularly delivered policy messages until now. Chairman Kim expressed his intention to continue holding regular briefings with reporters every month to explain major financial policies.
At the briefing, Chairman Kim explained his stance on key issues such as household debt, the soundness of the secondary financial sector, the corporate value-up program, amendments to the Commercial Act, and the abolition of the FIIT. When asked about critical evaluations of the corporate value-up program in the market, he responded, "From the perspective of companies' stock prices and the like, there is still a sense of underperformance compared to other countries," but added, "It should not be evaluated in the short term."
He then said, "The parts that can serve as momentum lie with the National Assembly," urging the legislature to take action for the passage of related bills. He noted, "The FIIT will have direct and indirect effects, and incentive bills such as tax benefits to promote shareholder returns are currently pending."
When asked about the Financial Services Commission's position on amendments to the Commercial Act, Chairman Kim said, "We share the view that transparency in governance decision-making should be enhanced to increase corporate value," adding, "The criticism points are that general shareholders have been relatively neglected during processes such as corporate mergers and physical divisions, and that these decisions were unfair."
Currently, the Financial Services Commission is discussing amendments to the Commercial Act with the Ministry of Justice as part of efforts to improve corporate governance. In the capital market, there is a prevailing opinion that the 'duty of loyalty of directors' clause should include 'shareholders.' However, the business community strongly opposes this, arguing that it undermines the foundation of the Commercial Act system.
Chairman Kim stated, "We are actively considering systems to better protect general shareholders in relation to physical divisions and plan to present specific measures within the year," adding, "Ultimately, amendments to the Commercial Act require further discussion."
He explained, "If corporate directors are legally obligated to have a duty of loyalty to 'shareholders' under the Commercial Act, it must be determined whether this aligns with the legal framework of the Commercial Act. Another issue is that despite amendments aiming for transparent decision-making by directors, if the company and shareholders are placed on equal footing as subjects of the duty of loyalty, there will be high uncertainty about how directors should make decisions."
He continued, "The government must also thoroughly review the concerns raised by the business community," emphasizing, "Discussions within the government are taking a long time, and the deliberations are deep."
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