Industry's Final Appeal to the National Assembly on the 'Fair Economy 3 Laws'

At the Industrial Development Forum, 26 Industry Groups Unite: "Reconsider the Commercial Act and Fair Trade Act"
"Contrary to the Global Trend of Supporting and Expanding Corporate Investment," They Visit the National Assembly to Voice Strong Criticism

[Asia Economy Reporter Kim Hyewon] As the first regular session of the 21st National Assembly opens, the business sector, including the automobile, semiconductor, steel, and shipbuilding industries, has jointly responded to lower the intensity of amendments to representative corporate-restricting bills.

On the 10th, the '5th Industrial Development Forum,' hosted by 26 economic and industry-specific organizations such as the Automobile Industry Federation, Semiconductor Industry Association, Steel Association, Petrochemical Association, Shipbuilding Association, Textile Federation, and Bio Association, became a platform condemning the push to postpone or carefully reconsider the amendments to the Commercial Act and the Fair Trade Act, which are likely to pass the National Assembly plenary session amid the severe management difficulties caused by the COVID-19 pandemic.

While countries worldwide are focusing on policies, tax support, and deregulation to help companies recover performance and expand new business investments to overcome the COVID-19 crisis, South Korea is insisting on amending anti-corporate bills that cause contraction in corporate management activities.

This forum was a last appeal directly to the National Assembly, the final stage of legislation in the industrial field, after economic organizations repeatedly submitted joint statements reflecting corporate difficulties to the government, which fell on deaf ears. They plan to visit the National Assembly to persuade lawmakers to reflect the voices of the industrial field as much as possible, starting with this forum.

In the economic and academic circles, the amendment to the Commercial Act aims to increase checks on the board of directors through separate appointment of audit committee members, easing the exercise requirements of minority shareholder rights, and introducing a multiple derivative suit system. However, it is believed that from the start, it is likely to be embroiled in constitutional disputes over property rights infringement. There are concerns that it will be a detrimental amendment facilitating the entry of speculative capital into the board, making management rights vulnerable to frequent threats.

There is also a view that regulatory bills targeting large corporations will negatively affect small and medium-sized enterprises (SMEs) and mid-sized companies. Jung Wooyong, Policy Vice Chairman of the Korea Listed Companies Association, pointed out, "Unprecedented worldwide rules such as the 3% rule, multiple derivative suits, and self-dealing regulations may become obstacles to the growth of SMEs and mid-sized companies, which lack human and physical infrastructure, rather than narrowing the gap between large corporations and SMEs/mid-sized companies." If the amendment to the Fair Trade Act, including the abolition of the exclusive prosecution rights of the Fair Trade Commission, leads to indiscriminate lawsuits, the burden on SMEs, which have weak legal response capabilities, will inevitably increase.

Within the National Assembly, there are opinions that the economic sector's views should be re-reflected during bill review. A ruling party lawmaker from the Legislation and Judiciary Committee, who requested anonymity, said, "I receive countless contacts from large corporations' government relations officers, and complaints are flooding in from associations and organizations," adding, "We fully understand the concerns of the business sector, and since opinions among party lawmakers are not unanimous, thorough discussions will be held before the review."

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