7 Economic Organizations Submit Joint Statement to National Assembly: "Amendments to Commercial Act and Fair Trade Act Harm Economy"

[Asia Economy Reporter Kiho Sung] Seven economic organizations, including the Korea Employers Federation (KEF), Korea Federation of SMEs, Korea International Trade Association, Korea Federation of Medium-sized Enterprises, Korea Listed Companies Association, KOSDAQ Association, and Korea Industrial Federation Forum, announced on the 7th that they have established a joint position on the amendments to the Commercial Act and the Fair Trade Act and submitted their related stance to the National Assembly.

Through the joint statement, the business community said, "The regulation on the appointment of audit committee members under the Commercial Act excessively restricts voting rights, which is inconsistent with the legal principles of the Commercial Act and may even be unconstitutional," adding, "The entry of foreign capital and competing forces into the board of directors will lead to the leakage of core corporate information, shaking the foundation of our companies' management systems."

They continued, "The multiple derivative lawsuit system, which is unprecedented worldwide in its broad scope of application, will lead to malicious litigation abuse and undermine the stability of corporate investment activities," emphasizing, "The relaxation of the holding period requirement for exercising minority shareholder rights in listed companies will further reduce the ability of small and medium-sized enterprises and medium-sized enterprises to respond to attacks from foreign equity and manipulative forces."

Furthermore, they stated, "The abolition of the exclusive right to file complaints under the Fair Trade Act will skip the Fair Trade Commission's administrative and specialized procedures and initiate judicial investigations, increasing the burden of criminal punishment on companies," and added, "The expansion of the scope of internal transaction regulations will effectively impose preemptive and fundamental restrictions on efficient and cooperative transactions between affiliates, raising concerns about a decline in industrial competitiveness."

They also pointed out, "The increase in the mandatory shareholding ratio for holding companies will significantly raise the cost of establishing subsidiaries amid the COVID-19 situation, negatively impacting investment and employment."

The business community urged, "We earnestly ask the government, ruling party, and the National Assembly to listen to and accept the business community's alternatives during the remaining consultation process, as we are doing our utmost to overcome the greatest economic and employment crisis caused by COVID-19."

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