Economic Organizations Demand "Reflection of Business Sector Views" in Amendments to the Fair Trade Act and Commercial Act

[Asia Economy Reporter Kim Jong-hwa] As ruling party lawmakers belonging to the National Assembly's Political Affairs Committee showed signs of unilaterally passing amendments to the Fair Trade Act and the Commercial Act, economic organizations rebutted by saying, "The passage process is proceeding without reflecting the economic sector's position," and reiterated their existing stance to "maintain the current system or accept alternatives."

On the 7th, seven economic organizations including the Korea Employers Federation, Korea Federation of Small and Medium Business, Korea International Trade Association, Korea Federation of Medium-sized Enterprises, Korea Listed Companies Association, KOSDAQ Association, and Korea Industrial Federation Forum distributed a joint economic sector statement on the "Amendments to the Commercial Act and Fair Trade Act," systematically rebutting the controversial key provisions.

The economic organizations pointed out that regarding the Commercial Act amendment's restrictions on the appointment of audit committee members, "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." Regarding the multiple derivative lawsuit system, they rebutted, "The scope of application is unusually broad worldwide, which will lead to malicious lawsuits and undermine the stability of corporate investment activities."

They noted that the abolition of exclusive prosecution rights "will omit the Fair Trade Commission's administrative and professional procedures, initiate judicial investigations, and increase the burden of criminal punishment on companies," and expressed concern that the expansion of internal transaction regulations "will effectively and fundamentally regulate efficient and cooperative transactions between affiliates in advance, leading to a decline in industrial competitiveness."

Regarding the increase in the mandatory shareholding ratio for holding companies, they opposed the amendment, stating, "It will significantly increase the cost burden of establishing subsidiaries amid the COVID-19 situation, negatively affecting investment and employment."

The economic organizations submitted the "Economic Sector Alternatives to Key Provisions of the Fair Trade Act and Commercial Act Amendments" containing these points to the National Assembly and urged, "We earnestly request that the government, ruling party, and the National Assembly listen to and accept the economic sector's alternatives as we do our best to overcome the greatest economic and employment crisis caused by COVID-19."

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