Lee Jae-myung "I will amend the Commercial Act within the regular session"... to be pursued as party policy

The Issue is the Director's Duty of Loyalty to Shareholders
Democratic Party Forms TF, Increasing Chances of Passage Within the Year
People Power Party and Presidential Office Oppose

The Democratic Party of Korea has set a policy to pass a revision of the Commercial Act within the year that expands the duty of directors' loyalty from 'the company' to 'the company and shareholders.' They are expected to push it through even if the ruling party opposes it. The revision may also include provisions related to improving corporate governance.

On the 6th, Lee Jae-myung, leader of the Democratic Party, emphasized at the Supreme Council meeting held at the National Assembly, "We will amend the Commercial Act within this regular session of the National Assembly to prevent the abuse of controlling shareholders' power," adding, "This is a measure to prevent unfair transactions, so I believe most sound companies will support it." He then pressured, "Why does the government and ruling party oppose it? Are you trying to allow stealing?"

According to a compilation of reports by Asia Economy on the 6th, the 'Republic of Korea Stock Market Revitalization Task Force (TF),' which officially launched that day, will promote the Commercial Act revision as the party's official stance. Jeong Jin-wook, chief secretary to the floor leader, said in a phone call, "(The Commercial Act revision) will be difficult to pass without being the party's official stance," and "We will push it as the party's official stance." The focus is expected to be on completeness rather than speed. The TF will hold three discussion sessions on the issues surrounding the Commercial Act revision starting from the 8th. If necessary, they also plan to hold meetings with investors and businesspeople. The final passage in the plenary session is expected around the end of the year, when discussions on the abolition of the financial investment income tax and related budget bills are completed.

Lee Jae-myung, leader of the Democratic Party of Korea, is touching his face while attending the Supreme Council meeting held at the National Assembly on the 4th. On the same day, Lee stated, "We have agreed to abolish the financial investment tax," and simultaneously argued that the Commercial Act must be amended. Photo by Kim Hyun-min

They also announced that even if they cannot reach an agreement with the People Power Party, they will use the structure of the standing committee, where the revision can be passed with only the support of Democratic Party members, to submit the revision to the plenary session. The Legislative and Judiciary Committee (Legislation and Judiciary Committee), which oversees the Commercial Act, is chaired by Democratic Party member Jeong Cheong-rae. Numerically, there are more Democratic Party members. When asked if it is possible to push it forward solely with the Democratic Party, Chief Secretary Jeong replied, "It is possible." Kim Hyun-jung, a member of the TF, said, "If (an agreement) is not reached, since we have more members in the Legislation and Judiciary Committee, we will handle it," adding, "The revision is something that even Han Dong-hoon, leader of the People Power Party, agreed to during his time as Minister of Justice."

The People Power Party and the Presidential Office oppose the revision. Kim Sang-hoon, chairman of the People Power Party Policy Committee, said there is a 'logical contradiction' in the revision due to the diverse interests among shareholders. The Presidential Office has been pushing for the Commercial Act revision but has withheld its position due to opposition from the business community. A senior official from the Presidential Office said the day before, "(The revision) is considered necessary," but added, "If shareholder loyalty is made mandatory for all companies, it could become a burden for companies or an issue of conflict among shareholders."

Within the Democratic Party, there are concerns that if the revision passes without bipartisan agreement, it may be blocked by the president's veto power. Lee Jung-moon, vice chairman of the Democratic Party Policy Committee, said, "We are considering whether the Commercial Act can be pushed through like the special prosecutor law."