On the other hand, the Democratic Party of Korea threatened to come up with a "stronger bill" if acting Han exercised his veto. This is the point where acting Han, who is already facing strong opposition pressure over the appointment of Ma Eun-hyuk as a candidate for constitutional judge, is deepening. However, given that the government is in the right position to enhance shareholder profits through the revision of the Capital Markets Act, the view that acting authority Han will exercise his veto power is dominant.
The heads of economic organizations, who met with Han at the Prime Minister's Office in Samcheong-dong, Jongno-gu, Seoul, reportedly opposed the amendment to the commercial law, which passed the National Assembly plenary session led by the Democratic Party on the 13th, saying it could lead to excessive lawsuits by shareholders and attacks on management rights of activist funds. He also shared the situation in which Korean companies have suffered from tariff barriers since the inauguration of the Donald Trump administration.
Sohn Kyung-sik, president of the Korea Employers Federation, said, "The recent revision of the commercial law passed by the National Assembly could increase management uncertainty and dampen investment and innovation, so please discuss it more carefully." Ryu Jin, president of the Korea Business Association, also said, "It can cause very serious side effects to our economy and businesses, so please review it carefully."
"As the U.S. government has decided to impose 25% item tariffs on cars manufactured abroad, our core industry, is also feared to be significantly affected," an acting authority said. "We will pour all our wisdom and capabilities to overcome the crisis and protect Korea's national interests and industries."
Chairman Choi, Chairman Ryu, Chairman Yoon Jin-sik of the Korea International Trade Association, Chairman Sohn, Chairman Kim Ki-moon of the Korea Federation of Small and Medium Business, and Chairman Choi Jin-sik attended the meeting. It is the first time in about three months that the acting president and the head of six economic organizations met since the luncheon meeting on December 23 last year.
The Democratic Party reacted sensitively to these business movements. Previously, the Democratic Party of Korea passed only the directors' obligation to be faithful to shareholders and the electronic shareholders' meeting first among the various agendas of the amendment to the Commercial Act. However, if the veto is exercised, it will be able to push ahead again, including the mandatory concentrated voting system, which was excluded from the final draft, and the separate election of audit committee members.
A Democratic Party lawmaker who was involved in the revision of the commercial law said, "The need for revision of the commercial law has also been recognized by government and ruling party officials, but if they exercise their veto now, they can push ahead with the original plan again." Jin Sung-joon, chairman of the Democratic Party's policy committee, said, "If the government exercises its veto power and the amendment to the commercial law is finally rejected, we will pursue it again."
Concerns have been steadily raised in the business community that the introduction of a concentrated voting system that enables minority shareholders to vote when appointing directors could be abused by outside forces such as hedge funds. If the separate election of audit committee members is also implemented, the so-called "3% rule" will be applied, which allows voting rights to be exercised up to 3% of major shareholders' stocks from the appointment stage. In addition, there are many voices that the influence of minority shareholders will increase too much if the concentrated voting system is applied.
On the other hand, the people's power is supporting the exercise of the right to veto amendments to the commercial law. Kim Sang-hoon, chairman of the policy committee, said on the same day, "I strongly urge the Democratic Party to reconsider the revision of the Commercial Act, the re-issuance of the Yellow Envelope Act, the revision of the Banking Act, and the strengthening of regulations." "Democratic Party Chairman Lee Jae-myung said at a meeting with Samsung Electronics Chairman Lee Jae-yong on the 20th that the country will do well only when companies do well," said Kim, chairman of the policy committee, criticizing, "It prevents labor market flexibility, hinders business activities, and teases companies and the people."
Meanwhile, confusion is intensifying as temperature differences between financial authorities have been revealed over the revision of the commercial law. This is because Kim Byung-hwan, chairman of the Financial Services Commission, and Lee Bok-hyun, chairman of the Financial Supervisory Service, expressed conflicting opinions on the exercise of veto power at press conferences and radio broadcasts, respectively the previous day. Chairman of the states Affairs Commission Kim said, "We are concerned about side effects," and that a revision to the Capital Markets Act should be introduced first.
On the other hand, Lee, who has been opposing the exercise of veto power since the revision of the Commercial Act was passed, maintained the same position. Director Lee claimed, "If you exercise your right to reject it, the government's will will be suspected, and eventually it could affect the stock market and the subsequent foreign exchange market."
Under these circumstances, acting authority Han is expected to settle his position on the amendment to the commercial law, which is due soon. The deadline for determining the right to promulgate and reject the amendment to the Commercial Act is the 5th of next month. It is predicted that acting authority Han could decide his final position at a regular Cabinet meeting scheduled for the 1st of next month at the earliest.
[Reporter Ahn Jung Hoon / Reporter Hong Hyejin / Reporter Moon Jae Yong / Reporter Beat Kyung]
