Son Kyung-sik "Corporate Regulation 3 Laws Without Management Rights Defense Measures Threaten Business Foundation"

Samsung Electronics President Lee In-yong and Heads of 6 Major Groups Gather Unusually in One Place
Concerns Raised Over ILO-Related Labor Union Law Amendments

Chairman Sohn Kyung-shik of the Korea Employers Federation is giving a greeting at the Korea Employers Federation Chairman Group Meeting hosted by the Chinese Ambassador to Korea held on the 19th at the Western Chosun Hotel in Jung-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Hwang Yoon-joo] Sohn Kyung-shik, chairman of the Korea Employers Federation (KEF), met with Lee Nak-yeon, leader of the Democratic Party of Korea, and urged consideration of the business community's position, stating that the amendment to the 'Three Corporate Regulation Laws' could threaten the foundation of corporate management.

On the morning of the 6th, Sohn met Lee, who visited the KEF building, and said, "If only regulatory systems are introduced without any discussion on measures to defend management rights, corporate activities aimed at economic recovery will inevitably be further restrained."

Sohn expressed concern that the amendment to the Commercial Act imposes direct damage on the exercise of corporate management rights and strategic management promotion, and enforces regulations that are stricter compared to global standards.

He said, "If audit committee members are separately appointed, speculative foreign funds or competing companies could intrude into key internal management matters of the company, and with external personnel participating in the board of directors, the foundation of the management system could be threatened."

Regarding the multiple derivative lawsuit system, he stated, "It could cause excessive management interference when companies invest in future new technologies and new businesses through unlisted companies, and there is a risk of excessive lawsuits against subsidiaries by minority shareholders of the parent company."

Regarding the amendment to the Fair Trade Act, he pointed out, "Expanding the scope of companies subject to the regulation of private interest appropriation undermines the reasonable level of competitiveness needed to respond to fierce global competition, and there are side effects such as the transfer of volume to foreign companies, as well as concerns that large-scale share sales to reduce regulatory burdens could lead to management rights burdens."

Sohn said, "Raising the mandatory shareholding ratio for subsidiaries of holding companies will make it difficult even to establish new subsidiaries for investment and jobs, and the abolition of the Fair Trade Commission's exclusive right to prosecute raises significant concerns that corporate image could be damaged simply because judicial investigations by the prosecution begin immediately without a careful investigation process."

He also mentioned that if the Financial Group Supervision Act is passed, strict government soundness regulations will increase the burden on companies to expand capital or sell shares of affiliates.

In addition, Sohn conveyed the business community's concerns about the amendment to the Labor Union Act related to the ILO convention. The amendment allows dismissed workers and unemployed persons to join labor unions.

Sohn said, "Among major advanced countries, our labor-management relations are the most confrontational with the highest number of strikes, and this will further deepen the imbalance," adding, "Along with strengthening the rights of workers and labor unions, please also review systems that do not conform to global standards, such as the prohibition of replacement labor during strikes and punishment for unfair labor practices limited to employers."

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