"Hesitant to Invest, Fearing Imprisonment for Corporate Management in Korea"
President Lee Orders Improvement to Prevent Abuse of "Breach of Trust" Charge That Stifles Businesses
President Lee Jae Myung is speaking at the 3rd Emergency Economic Inspection Task Force (TF) meeting held at the Yongsan Presidential Office Building in Seoul on the 30th. Photo by Yonhap News
President Lee Jaemyung announced that he will overhaul 30% of economic criminal penalties that hinder corporate management within one year. He particularly emphasized his intention to prevent the abuse of the "breach of trust" charge, which has been identified as a major factor deterring domestic investment. This statement is seen as an effort to address concerns in the business community, especially as domestic economic organizations have described the National Assembly's moves to amend the Commercial Act and the Trade Union Act as "devastating."
On this day, presiding over the third Emergency Economic Inspection Task Force at the Yongsan presidential office, President Lee stated, "To ensure that excessive economic criminal penalties do not stifle corporate management activities, the government will immediately launch a task force to rationalize economic criminal penalties," and added, "Starting with this regular session of the National Assembly, we will set a clear goal to overhaul 30% within one year and push forward with this plan."
President Lee continued, "We will do our utmost to resolve and abolish administrative or unnecessary regulations," and pledged, "Through regulatory rationalization, we will take swift action to enable companies to engage in creative activities."
"Hesitant to Invest for Fear of Imprisonment... Will Address Abuse of Breach of Trust Charge"
President Lee Jae Myung is presiding over the 3rd Emergency Economic Inspection Task Force (TF) meeting held at the Yongsan Presidential Office Building in Seoul on the 30th. Photo by Yonhap News
President Lee also expressed his intention to improve the breach of trust charge system. He explained, "It is said that some hesitate to invest domestically because they fear imprisonment if something goes wrong while conducting corporate management activities in Korea," and added, "As the breach of trust charge is being abused and stifling corporate activities, it is time to seek institutional improvements once again."
He further noted, "There are questions being raised as to whether imposing additional criminal sanctions, on top of economic and financial penalties, simply for violating trust, aligns with international standards."
Previously, on July 29, Minister of Justice Jung Sungho instructed the Supreme Prosecutors' Office to exercise caution in applying the breach of trust charge to corporate managers. Minister Jung explained his reasoning by stating, "There have been continuous concerns that strategic decisions made in corporate management are being investigated and prosecuted as breach of trust after the fact, leading to a growing tendency to avoid risks in both the public and corporate sectors."
"100 Trillion Won National Fund to Be Created... Will Become a Market-Oriented Government"
President Lee Jae-myung salutes the national flag as he begins the 3rd Emergency Economic Inspection Task Force (TF) meeting held at the Yongsan Presidential Office building in Seoul on the 30th. Photo by Yonhap News
President Lee also promised, "We will promptly prepare a plan to create a national fund of over 100 trillion won with participation from both the public and companies," and added, "We will invest in future strategic industries that will lead the next 20 years." President Lee's vision is to create future growth engines in advanced industries, including artificial intelligence (AI), by developing industry-specific development plans that include groundbreaking regulatory innovation.
President Lee described the current administration as "a practical, market-oriented government." He pledged to companies, "We will be a government that supports and encourages corporate activities," and asked government officials, "Take the lead in restoring corporate vitality and expanding the investment climate." To this end, the Emergency Economic Inspection Task Force, which President Lee established as his first executive order on his inauguration day, will be reorganized as the "Growth Strategy Task Force" to discuss growth initiatives.
President Lee's pro-market and pro-business remarks come amid concerns that, since the launch of the administration, amendments to the Commercial Act and the Trade Union Act, as well as increases in the corporate tax rate, have been tightening regulations on businesses. On July 29, eight major domestic economic organizations issued an emergency statement, expressing that they "cannot hide their devastating feelings, which go beyond deep concern, in the face of the National Assembly's push to enforce amendments to the Commercial Act and the Trade Union Act during these grave economic times." These organizations appealed, "Please reconsider thoroughly from the perspective of national interest."
"(Seoul Metropolitan Area) Unbalanced Growth Strategy Hinders Korea's Growth"
President Lee Jae Myung is heading to his seat after saluting the national flag at the 3rd Emergency Economic Inspection Task Force (TF) meeting held on the 30th at the Yongsan Presidential Office Building in Seoul. Photo by Yonhap News
President Lee also stated, "There is one thing we must fundamentally reconsider regarding Korea's growth strategy," and pointed out, "The negative effects of this (Seoul metropolitan area-centered) unbalanced growth strategy have now reached a point where they are hindering Korea's sustainable growth." He continued, "In particular, the regional imbalance described as the single-pole system of the Seoul metropolitan area is succinctly reflected in two phenomena: overpopulation and, one might say, explosion in the capital area, and the extinction of local regions. These two aspects encapsulate Korea's current situation," adding, "Balanced development and regional balanced development have now become an inevitable survival strategy for Korea's growth."
President Lee explained, "Until now, regional balanced development was more of a consideration for local areas, but now it has become an unavoidable strategy for Korea to survive and continue to grow and develop." He added, "Recently, we allocated more funds for livelihood recovery consumption coupons to local regions, and provided additional support to areas at risk of depopulation through differentiated fiscal policies. Going forward, we will institutionalize this approach in all national policies, so that Korea's resources and opportunities can be used efficiently, enabling sustainable growth."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
