"Companies All Set to Leave" Business Community Rushing to National Assembly Over Fair Trade 3 Laws

Kwon Tae-shin, Former Vice Chairman of FKI, Meets Kim Jong-in, Emergency Committee Chairman of People Power Party, to Convey Business Difficulties
Korea Chamber of Commerce and Industry, Korea Employers Federation, and Other Business Groups Rush to National Assembly to Express Concerns Over Fair Economy 3 Laws Causing Business Activity Contraction

[Asia Economy Reporter Changhwan Lee] As support for the so-called 'Fair Economy 3 Laws'?including the Commercial Act, the Fair Trade Act, and the Financial Group Integrated Supervision Act?grows not only within the government and ruling party but also among opposition parties, anxiety and concerns within the business community are deepening. Even the heads of major economic organizations have directly visited the National Assembly to repeatedly urge careful review during the bill examination process.

On the 18th, Kwon Tae-shin, Vice Chairman of the Federation of Korean Industries (FKI), told Asia Economy in a phone interview, "I recently met Kim Jong-in, the Emergency Committee Chairman of the People Power Party, at the National Assembly to convey the business community’s concerns regarding the Fair Economy 3 Laws."

The meeting between Chairman Kim and Vice Chairman Kwon took place unexpectedly on the 15th. After Chairman Kim expressed his sympathy for the government’s intent behind the Fair Economy 3 Laws in a recent media interview, Vice Chairman Kwon contacted him directly to urgently arrange the meeting. It is known that Vice Chairman Kwon and Chairman Kim have had a connection since Kwon’s time at the Ministry of Finance and Economy (now the Ministry of Economy and Finance).

Vice Chairman Kwon said, "As the economic crisis continues, the fundamental strength of our companies has steadily declined over the past few years, and with the spread of the novel coronavirus disease (COVID-19), they are facing multiple layers of difficulties. In this context, if the Fair Economy 3 Laws are passed, companies will truly be pushed to the brink."

Not only the FKI but also all economic organizations?including the Korea Chamber of Commerce and Industry, the Korea Employers Federation, the Korea Federation of Medium-sized Enterprises, and the Korea Listed Companies Association?have submitted statements to the National Assembly, the last 'lifeline,' to jointly respond, but their efforts seem insufficient.

Among the Fair Economy 3 Laws, the amendments to the Commercial Act involve contentious issues such as the separate appointment of audit committee members, strengthening the 3% voting rights restriction for major shareholders, and the introduction of a multiple derivative suit system.

The amendments to the Fair Trade Act focus on expanding the scope of regulations against unfair profit-seeking, abolishing the exclusive right of the Fair Trade Commission to file complaints, and restricting voting rights of public interest corporations. The Financial Group Integrated Supervision Act strengthens regulations on complex financial groups that have financial affiliates but are not financial holding companies.

Companies are concerned that the Fair Economy 3 Laws will not only open the door for foreign speculative forces to attack management rights but also tighten regulations on large corporations’ governance structures, thereby stifling corporate management and potentially causing sluggish investment and employment.

◆Companies: "Fair Economy 3 Laws Will Severely Stifle Corporate Management and Push Businesses Overseas"

Economic organizations have recently issued several joint statements, saying, "If the amendments to the Commercial Act and the Fair Trade Act are passed, threats to corporate management rights will increase, and funds that should be used for investment and job creation will be wasted on unnecessary share acquisitions, causing serious side effects." They added, "The main contents of the amendments are Galapagos-style regulations that do not align with global standards, and their introduction will weaken the global competitiveness of our companies and seriously harm the national economy."

However, the government and ruling party are strongly determined to pass the Fair Economy 3 Laws in this National Assembly session, which were also campaign pledges of President Moon Jae-in. Accordingly, not only economic organizations but also individual companies are continuously visiting the National Assembly to persuade lawmakers, convey the business community’s position as much as possible, and appeal to block the legislation before the amendments are enacted.

Park Yong-man, Chairman of the Korea Chamber of Commerce and Industry, is scheduled to visit the National Assembly as early as next week to communicate the difficulties faced by the business community, and the Korea Employers Federation is also expected to frequently visit the National Assembly to express the positions of its member companies.

A senior executive from the business community lamented, "Companies are seriously concerned about the political moves regarding the amendments to the Commercial Act and the Fair Trade Act," adding, "While encouraging all kinds of investments when needed to revitalize the economy, at the same time, strengthening regulations that constrain companies creates a contradictory reality that even leads to remarks suggesting that our companies should go abroad."

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