[Exclusive] National Assembly Judiciary Committee to Delay 'Commercial Act Amendment' Processing Beyond Regular Session

Legislation Committee Subcommittee to Hold Public Hearing on the 16th
Subcommittee Chair Kim Seungwon: "Procedure to Gather Opinions from Companies and Shareholders"
Passage within the Regular National Assembly on the 10th Seems Difficult

The National Assembly's Legislation and Judiciary Committee's First Subcommittee on Bill Review (Legislation Committee 1st Subcommittee) plans to hold a public hearing on the 'Commercial Act Amendment Bill' on the 16th. Accordingly, the initial plan by Lee Jae-myung, leader of the Democratic Party of Korea, to handle the bill within the regular session is expected to be delayed. The emphasis is placed on the possibility of 'processing within the year,' as stated by the Democratic Party's Task Force for Stock Market Revitalization.

Kim Seung-won, the opposition party's secretary and chairperson of the 1st Subcommittee of the Legislation Committee and a member of the Democratic Party of Korea, said in a phone interview with Asia Economy on the 3rd, regarding the 'schedule for the public hearing on the Commercial Act Amendment Bill,' "I understand it is on the 16th," and added, "I think we need to invite both the corporate side and shareholders/investors." He explained the background by saying, "There are opinions that the government's proposal is insufficient, so we intend to hear those contents as well." The Legislation Committee's 1st Subcommittee began reviewing the Commercial Act Amendment Bill at a meeting held on the 26th of last month. During the review, the ruling party proposed a public hearing to hear corporate opinions, and the bill review is continuing this month as well.

Kim Seung-won, Chair of the Subcommittee on Bill Examination No. 1 of the National Assembly Judiciary Committee, is striking the gavel at the Subcommittee on Bill Examination No. 1 meeting held at the National Assembly on the 26th. This meeting discusses the "Commercial Act Amendment" which includes adding "shareholders" to the duty of loyalty for directors. Photo by Kim Hyun-min

The Commercial Act Amendment Bill must go through the Legislation Committee's 1st Subcommittee, the full committee meeting, and a plenary session vote to be finally legislated. As discussions at the Legislation Committee level are prolonged, the Democratic Party is expected to proceed with handling the Commercial Act Amendment Bill through methods such as convening a special session after the current session ends. On the 14th of last month, the Democratic Party adopted the Commercial Act Amendment Bill, which includes provisions such as the 'duty of loyalty of directors to shareholders,' as the party's official stance.

A public hearing is a procedure conducted to gather opinions from experts and others when a new bill ('enactment bill') is being prepared. It is considered unusual to hold a public hearing on an amendment bill. Due to strong opposition from the business community and the government/ruling party against the Commercial Act Amendment Bill, the Legislation Committee, which is the relevant standing committee, has arranged an opinion-gathering procedure.

The Democratic Party will also hold a 'policy discussion on the Commercial Act Amendment Bill' on the morning of the following day (the 4th), attended by representatives from the business community and investors. Meanwhile, the government and ruling party are showing a reserved attitude toward promoting the Commercial Act Amendment Bill and are pushing for an amendment to the 'Capital Markets and Financial Investment Services Act' that protects general shareholders, targeting only listed corporations. The Commercial Act Amendment Bill is a more comprehensive general law that applies to all corporations.