Despite Opposition from Kukim... Will the Commercial Act Amendment Bill Be Forcibly Passed in the Legislation and Judiciary Committee?

The Democratic Party of Korea has begun the parliamentary process for the amendment to the Commercial Act, centered on the ‘expansion of directors’ fiduciary duties to shareholders,’ while the People Power Party pressured for the withdrawal of the amendment together with economic organizations.

The National Assembly’s Legislation and Judiciary Committee held a plenary meeting on the morning of the 26th to discuss the amendment to the Commercial Act. After the committee’s plenary session, the amendment is scheduled for a vote at the National Assembly plenary session on the 27th.

Lee Jae-myung, leader of the Democratic Party of Korea, said at the party’s Supreme Council meeting on the 26th, "Kim Bok-hyun, Governor of the Financial Supervisory Service, Han Dong-hoon, former leader of the People Power Party, and even the President said it was necessary, so why is the People Power Party opposing it now?" He added, "With that attitude, it would be difficult to even be the perennial opposition party."

The ruling party plans to recommend that Choi Sang-mok, Acting Prime Minister and Minister of Economy and Finance, exercise the right to request reconsideration (veto) if the amendment to the Commercial Act is forcibly passed at the plenary session. Lee said, "The ruling party raised the veto before the Legislation and Judiciary Committee’s plenary session and the plenary session even voted on the amendment," and questioned, "How can you take responsibility for state affairs when you oppose policies proposed by the opposition without clear policy goals or economic vision?" Members of the Democratic Party’s ‘Korea Stock Market Revitalization Task Force (TF)’ held a press conference at the National Assembly communication office, stating, "The amendment to the Commercial Act is the first step to resolving the Korea discount."

On the 26th, the People Power Party held an ‘Economic Organizations Meeting to Enhance Shareholder Rights and Corporate Value’ at the National Assembly with eight economic organizations including the Korea Economic Association, expressing concerns about the movement to pass the amendment to the Commercial Act. They argued that domestic companies exposed to various disputes caused by excessive litigation would become prey to overseas speculative capital. They diagnosed that if companies focus only on defending management rights, competitiveness would weaken, and the impact on stock prices due to a decline in corporate value would lead to shareholder damage.

Kwon Seong-dong, floor leader of the People Power Party, said, "The Democratic Party’s insistence on amending the Commercial Act is like wielding an axe for a surgery that requires a scalpel," and claimed, "The moment the law passes, companies will be exposed to the poison of endless lawsuits and management paralysis."

He also publicly requested a debate with Lee Jae-myung. Floor leader Kwon proposed, "Let’s have a final debate on the amendment to the Commercial Act and inheritance tax issues before the plenary session," and added, "Let’s be properly evaluated in front of the people."