Pushing for Commercial Act Amendment?... Opposition Lawmaker Participates in Small Shareholders' Meeting Amid Delisting Crisis

Press Conference Scheduled in Front of Korea Exchange on the 10th

Members of the Democratic Party's Stock Market Revitalization Task Force (TF) are reportedly planning to participate in a gathering of minority shareholders of listed companies facing delisting. This move is interpreted as an effort to support the proposed amendments to the Commercial Act aimed at strengthening minority shareholders' rights.

Lee Jae-myung, leader of the Democratic Party of Korea, is speaking at the Democratic Party policy debate held at the National Assembly on the 19th, themed "How to Amend the Commercial Act." Photo by Kim Hyun-min

According to the National Assembly on the 9th, on the morning of the 10th, the Ewha Group Shareholders' Solidarity and the Shareholders Solidarity Coalition (hereinafter Shareholders Solidarity Coalition) will hold a press conference on the simplification of delisting procedures in front of the Korea Exchange in Yeouido, Seoul. It has been confirmed that Representative Lee Kang-il of the Democratic Party's Stock Market Revitalization TF will participate in the gathering. The Stock Market Revitalization TF is promoting amendments to the Commercial Act and the Capital Market Act to revitalize the capital market.

The Shareholders Solidarity Coalition plans to criticize the Financial Services Commission's (FSC) policy on simplifying delisting procedures on the same day. The FSC announced improvements to the delisting system, including immediate delisting for listed companies that receive two consecutive adverse audit opinions. Kim Hyun, the head of the Shareholders Coalition, stated, "This is an administrative convenience policy without fundamental alternatives," adding, "Especially since embezzlement and breach of trust occur regularly, when trading is suspended due to these issues, the shareholders bear the full brunt of the damage, yet there are no fundamental measures to address this." They also pointed out the problem that the reasons for delisting are not disclosed to shareholders. The Shareholders Coalition also plans to hold a press conference at the National Assembly's communication office on the same morning.

In addition to Representative Lee, it is understood that Representatives Kim Nam-geun and Oh Ki-hyung, the head of the TF, are reviewing their schedules to attend the gathering. This is seen as a move to support the promotion of the Commercial Act amendments, which include the Democratic Party's party-line policy to "strengthen the exercise of minority shareholders' rights." The proposed amendments to the Commercial Act include ▲ expanding the duty of loyalty of directors from the company to both the company and shareholders ▲ introducing a concentrated voting system for large listed companies ▲ expanding separate election of audit committee members ▲ and enabling electronic shareholder meetings for listed companies.

Representative Lee Kang-il of the Democratic Party said in a phone interview with Asia Economy, "The gathering is intended to prevent delisting from being used as a tool by owners to increase their personal wealth," adding, "It aims to strengthen delisting requirements as part of revitalizing the domestic stock market to protect minority shareholders from damage."

However, a TF member stated, "Regarding participation in the gathering, it was more about asking individual TF members for their willingness to participate rather than an official TF-level activity."