The Democratic Party of Korea expressed a flexible stance regarding the ongoing Corporate Law amendment during a meeting with economic groups on the 30th, stating, "If problems arise during the process, we can supplement it at any time." This suggests that the party is opening the possibility for future improvements to the system, considering concerns from the business community about potential infringements on management rights and the possibility of negative effects of the system. The business community advised to seek measures to minimize the negative consequences of misuse of the embezzlement law.
Jin Sung-jun, the policy chief of the Democratic Party, noted at a meeting held at the National Assembly with six economic organizations (Korea Chamber of Commerce and Industry, Korea Enterprises Federation, Korea International Trade Association, Korea Federation of Small and Medium Enterprises, Federation of Middle Market Enterprises of Korea, and The Federation of Korean Industries) that "If the Corporate Law is amended, it is expected to be an opportunity for our stock market to rise again," adding, "Since the Corporate Law amendment has been a task raised for the advancement of our capital market for a long time, I hope we can gather wisdom and strength on how to minimize the negative effects while realizing this task."
The policy chief stated, "Recently, the housing prices in Seoul have been fluctuating, prompting government authorities to introduce financial regulatory measures, but the Democratic Party believes that funds in the market should flow more into productive areas such as capital markets and stock markets rather than into unproductive areas like real estate and apartments," stating that "This would help strengthen our economy's structure and resilience."
He emphasized, "If issues arise as we are concerned about during the process, we are more than willing to supplement and revise the system."
This meeting took place as the ruling party is accelerating the Corporate Law amendment amid a rebound in stock prices and revitalization of the capital market following Lee Jae-myung's presidential inauguration. The Democratic Party plans to address the Corporate Law amendment aimed at expanding the fiduciary duty of directors from 'the company' to 'the company and shareholders' and obligating listed companies to hold electronic shareholders' meetings alongside general meetings during the extraordinary National Assembly session in June. The Corporate Law amendment will also include the gradual expansion of separate election of audit committee members, activation of the cumulative voting system, and a stance to limit the major shareholders from exercising voting rights over 3% of issued shares when appointing auditors or audit committee members, known as the 3% rule.
The business community expressed their agreement with the intent of the system but raised concerns about potential negative effects such as the infringement of management judgment principles, the broad application of the embezzlement law, and the possibility of litigious actions, requesting the establishment of measures to minimize these negative consequences.
Park Il-jun, the full-time vice president of the Korea Chamber of Commerce and Industry, stated, "The business community has no disagreement with revitalizing the stock market or creating fair conditions for the capital market. Reflecting the fiduciary duty clause in the Corporate Law emphasized by the members is one of the solutions," but requested to consider measures that can minimize negative consequences such as the abuse of the embezzlement law, infringement of management judgment principles, and issues related to safeguarding management rights.
He continued, "Yesterday, there were announcements regarding the new appointments of the Ministers responsible for the enforcement of the Corporate Law, the Ministry of Economy and Finance, which oversees the economy and corporate activities, and the Ministry of Trade, Industry, and Energy," adding, "If the government shows that it is contemplating ways to minimize negative consequences through consultations with relevant ministers, the economic growth policy of the people's sovereignty government, aimed at fair growth, will operate more effectively."
At the meeting that day, the Democratic Party was represented by Jin Sung-jun, the policy chief, Heo Young, the chief deputy floor leader, Lee Jeong-mun, the senior deputy policy chief, Oh Gi-hyung, the Chairperson of the 'KOSPI 5000 Special Committee,' and Kim Nam-geun, the deputy floor leader for people's livelihood, while the business community was represented by six organizations including KORCHAM, The Federation of Korean Industries, Korea Federation of Small and Medium Enterprises, Federation of Middle Market Enterprises of Korea, Korea International Trade Association, and Korea Listed Companies Association.