Kim Yong-geun, Vice Chairman of the Korea Employers Federation, "Maintain the Current Corporate Regulation 3 Laws... Concerns over Separate Appointment of Audit Committee Members and Multiple Litigation System"

"Concerns Grow Over Separate Appointment of Audit Committee Members and Multiple Litigation System"

[Asia Economy Reporter Hwang Yoon-joo] Kim Yong-geun, Vice Chairman of the Korea Employers Federation (KEF), stated that passing the 'Three Corporate Regulation Laws (Commercial Act, Fair Trade Act, Financial Group Supervision Act) amendment bills' could threaten corporate governance systems and that they should be maintained as they currently are.

On the 6th, Vice Chairman Kim told Asia Economy, "The business community's position is that the Three Corporate Regulation Laws amendment bills should be maintained as they are rather than being passed."

Kim emphasized, "The separate election of audit committee members and the multiple derivative lawsuit system concern corporate governance structures greatly," adding, "I hope that when serious discussions begin after the national audit, the voices of the business community will be taken into account."

Recently, the government submitted three bills to the National Assembly, including the 'Commercial Act Amendment Bill,' the 'Fair Trade Act Amendment Bill,' and the 'Financial Group Supervision Act Establishment Bill.' The business community is concerned about the amendment bills, which include provisions such as the collective lawsuit system and the expansion of punitive damages, referring to them as the 'Three Corporate Regulation Laws.'

The most controversial provisions are the 'multiple derivative lawsuit system' and the 'introduction of separate election of audit committee members.' The multiple derivative lawsuit system allows shareholders of a parent company to file derivative lawsuits against the management of its subsidiaries. The separate election of audit committee members limits the voting rights of major shareholders to within 3% when electing audit committee members. This could restrict the company's right to defend itself. This is why Vice Chairman Kim described the bills as "laws that affect the corporate governance framework."

Meanwhile, Lee Nak-yeon, leader of the Democratic Party of Korea, will meet with KEF Chairman Son Kyung-sik at the Korea Employers Federation in Mapo-gu on the morning of the same day to listen to the business community's views. Unusually, the CEOs of the six major groups will attend this meeting together, including Lee In-yong, President of Samsung Electronics; Gong Young-woon, President of Hyundai Motor Company; Jang Dong-hyun, President of SK Inc.; Hwang Hyun-sik, President of LG Uplus; Oh Sung-yeop, President of Lotte Holdings; and Kim Chang-beom, Vice Chairman of Hanwha Solutions.

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