Lee Jae-myung Proposes Public Debate on Commercial Act Revision: "Requesting Participation from Companies and Investors"

Proposal for Debate to Both Business and General Shareholders
Lee Jae-myung to Participate Directly in Debate

Lee Jae-myung, leader of the Democratic Party of Korea, proposed a public debate to the sharply divided business community and general shareholders regarding the amendment of the Commercial Act. While emphasizing the necessity of amending the Commercial Act to protect general shareholders, Lee left room for compromise.

Democratic Party of Korea leader Lee Jae-myung is speaking at the 1st Expanded Executive Meeting held at the National Assembly on the 22nd. Photo by Yonhap News

On the 22nd, at an expanded executive meeting held at the National Assembly in Yeouido, Seoul, Lee said, "The day before, the Korea Economic Association (KEA) issued an urgent statement with CEOs of major domestic companies expressing concerns about the amendment of the Commercial Act. It seems to be a request to refrain from actions due to anticipated difficulties in corporate management." He added, "On the other hand, general shareholders are demanding a swift amendment of the Commercial Act." He then proposed a public debate between both sides (business community and general shareholders) regarding the amendment and urged, "Please respond promptly to the public debate." Lee also expressed his intention to attend the public debate.

On the 4th, Lee decided to abolish the Financial Investment Income Tax (FIIT) and suggested amending the Commercial Act as a measure to enhance the value of the domestic stock market. During a meeting with general shareholders at a caf? in Yeouido, Seoul, on the 20th, he stated, "Amending the Commercial Act to expand directors' duty of loyalty is a way to resolve the issue of abuse of corporate control," and added, "We will definitely push forward with the amendment of the Commercial Act simultaneously with the abolition of the FIIT." The Democratic Party is pursuing a plan to not only expand the duty of loyalty of directors but also to explicitly state in the Commercial Act the obligation to protect the interests of all shareholders and treat them fairly.

However, the day before, KEA and CEOs from 16 groups including Samsung, SK, and Hyundai Motor issued an urgent statement opposing the amendment of the Commercial Act, expressing resistance to the Democratic Party's attempt to amend the law. They cited concerns that it could disrupt corporate management due to an increase in lawsuits. Kim Chang-beom, Executive Vice Chairman of KEA, stated, "If the amendment to the Commercial Act passes the National Assembly, many companies will suffer from a surge in lawsuits and attacks from overseas speculative capital," adding, "Board operations will become difficult, and significant challenges are expected in discovering new growth engines."

The Democratic Party's Stock Market Revitalization Task Force (TF) plans to meet with the business community next week to hear opinions related to the amendment of the Commercial Act. The TF is expected to discuss issues such as breach of trust and principles of business judgment with the Korea Chamber of Commerce and Industry, the Korea Employers Federation, and KEA.