Kweon Seong-dong, the floor leader of the People Power Party, officially requested the government to exercise its right of reconsideration (veto) regarding the Commercial Act amendment bill that the opposition, including the Democratic Party, pushed through on the 31st. The key issues in the amendment include expanding the 'duty of loyalty of directors' to shareholders from companies and mandating 'virtual shareholders' meetings.'
On the same day, the floor leader held an emergency press conference at the National Assembly and noted, “To protect national interests and shareholder interests, we request the exercise of the right of reconsideration regarding the Commercial Act amendment bill.”
He pointed out, “In the midst of a global tariff storm, now is the time to enhance market stability and reduce uncertainty,” and added, “However, on the 13th, the Democratic Party intensified economic confusion by forcing the Commercial Act amendment through without agreement from both parties.”
He continued, “Unreasonable split listing and partitioning must be improved. Thus, the ruling party and the government have been pushing for amendments to the Capital Markets Act to protect shareholders, receiving significant support from the economic sector as well,” and added, “Nevertheless, Representative Lee Jae-myung pushed through the amendment to the Commercial Act, which affects 1 million small and medium-sized enterprises and unlisted companies.”
The floor leader stated, “As a result, even unlisted companies will be faced with endless lawsuits and management rights defenses, which poses a risk of leading to overall market losses, rather than protecting shareholders.”
He remarked, “If the government exercises the right of reconsideration and the Commercial Act amendment bill is rejected, we will strengthen the protection of minority shareholders through amendments to the Capital Markets Act,” and strongly urged Democratic Party leader Lee Jae-myung to “stop exacerbating the confusion and cooperate on reasonable alternatives.”
The Commercial Act amendment bill, which includes the 'duty of loyalty of directors to shareholders' and 'mandatory virtual shareholders' meetings,' passed the National Assembly plenary session led by the opposition on the 13th. The deadline for the government's veto power on the Commercial Act amendment bill is the 5th of next month.
The amendment includes provisions to ▲expand the scope of 'the duty of loyalty of directors' from existing companies to 'companies and shareholders' and ▲state that directors must protect the interests of all shareholders when performing their duties. It also specifies that listed companies must hold virtual shareholders' meetings alongside regular meetings.
The People Power Party believes that minority shareholders can be sufficiently protected through amendments to the 'Capital Markets Act.' They propose that instead of the Commercial Act including unlisted companies, a targeted 'pinpoint regulation' should be implemented solely for mergers and partitioning of listed companies. They contend that if the amendment to the Commercial Act containing the 'duty of loyalty to shareholders' is enacted as demanded by the opposition, it will lead to rampant lawsuits from small shareholders and intensified management rights attacks by speculative capital.