The 3 Leaders of 'Chaebol Reform' in the 21st National Assembly: Park Yong-jin, Lee Won-wook, and Je Yoon-kyung

Checks on Major Shareholders' Voting Rights and Strengthening of Minority Shareholders' Voting Rights
President Moon's 'Equal Economy Theory' Linked with the Ruling Party's 'Fair Economy Completion Theory'
Aligned with Government Stewardship Code and 3% Rule
Companies Cry Out "Tilted Playing Field"

Park Yong-jin, a member of the Democratic Party of Korea known as the "Chaebol Sniper," delivering a greeting at the "Corporate Governance Improvement Forum" held at the National Assembly on the 2nd. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Moon Chaeseok] Attention is focused on whether the three ruling party lawmakers who were most active in proposing 'chaebol reform bills' during the 20th National Assembly will also introduce related bills in the 21st National Assembly.

According to political circles on the 14th, lawmakers Park Yong-jin, Lee Won-wook, and Je Yoon-kyung of the Democratic Party of Korea are expected to propose bills similar to those they introduced during the 20th session in the 21st session as well.

Most of these bills are connected to President Moon Jae-in's 'Equal Economy Theory' and Kim Tae-nyeon's, the Democratic Party floor leader, 'Realization of Economic Justice.'

They also align with government-issued enforcement ordinances concerning the protection of minority shareholder rights and the application of the Stewardship Code (guidelines for institutional investors' exercise of voting rights).

Among the laws proposed by Park Yong-jin, known as the 'chaebol sniper,' during the 20th session, the major shareholder voting rights bill, dubbed the 'Second Samsung C&T Merger Prohibition Act,' is representative.

Although the Fair Trade Commission announced on the 10th that it would create similar regulations through a bill amendment, it is more lenient than the 'Park Yong-jin Act.'

The core of the law is to restrict voting rights on domestic affiliate stocks held by companies engaged in finance or insurance within mutual investment-restricted business groups (with total assets exceeding 10 trillion won).

However, the Fair Trade Commission's proposal opens the door for voting rights to be exercised in cases such as ▲acquiring and owning stocks to engage in finance or insurance business ▲acquiring and owning stocks with approval under the Insurance Business Act for efficient operation and management of insurance assets ▲resolutions at the shareholders' meeting of the relevant domestic affiliate (limited to listed companies) on appointing or dismissing executives, amending articles of incorporation, or merging with other companies within the affiliate.

In addition, Park proposed a bill that excludes the stocks of the controlling shareholder (same person) or their special related persons from the total issued shares when deciding on executive appointments and remuneration or mergers and spin-offs of affiliates.

While the stated purpose is to strengthen minority shareholder voting rights, it is linked to 'chaebol reform' in that it limits the controlling shareholder's authority.

The person on the right is Lee Won-wook, a member of the Democratic Party of Korea. He has been a consistent voice in support of small business owners. (Photo by Yonhap News)

Democratic Party lawmaker Lee Won-wook focused on enhancing the efficiency of the Fair Trade Commission's administrative sanctions to regulate corporate unfair trade during the 20th session.

First, he proposed imposing fines of up to 10% of sales or 2 billion won on mutual investment-restricted business groups that submit false data regarding special related persons and stock status.

He aimed to legally prohibit excessive reductions of fines to properly recover unfair profits resulting from legal violations.

The amendment bill he proposed on September 9, 2016, which was discarded due to term expiration, stated, "When reducing calculated fines, the scope shall be limited to within half, except that voluntary reporters of unfair joint acts may receive a full reduction."

The photo shows the 'Announcement Ceremony for the Improvement of Transaction Practices between Large and Small-Medium Enterprises and the Expansion of Win-Win Cooperation' held at the National Assembly on December 16 last year. The second person from the left is Je Yoon-kyung, a member of the Democratic Party of Korea. Photo by Yoon Dong-joo doso7@

Among the bills proposed by Je Yoon-kyung, the amendment strengthening the rights of small business owners or franchisees is representative.

Je's amendment states, "Business groups established by small business owners and composed of franchise business operators may, with the approval of the Fair Trade Commission, agree on or allow other businesses to set transaction conditions, payments, and payment terms for the purpose of rationalizing transaction conditions."

Chairman Kim Seung-yeon of Hanwha Group. (Photo by Asia Economy DB)

Additionally, issues such as large business groups' internal transactions and restrictions on competition during mergers of major companies are ongoing.

On the 27th of last month, the Fair Trade Commission imposed a fine of 4.4 billion won and corrective orders on Mirae Asset Group (de facto holding company = Mirae Asset Consulting) for internal transactions.

Hanwha Group (holding company = Hanwha) sent an investigation report, equivalent to a prosecution indictment, alleging that it excessively allocated internal transactions to affiliates based on a large proportion of internal transactions.

The corporate merger between Woowa Brothers (operator of Baedal Minjok) and Delivery Hero (operator of Yogiyo) has sparked continuous controversy over whether it restricts market competition, as the post-merger shareholding ratio exceeds 90%.

This content was produced with the assistance of AI translation services.