KCCI Expresses Regret Over Moves to Pass Amendments to Commercial Act and Fair Trade Act Unilaterally

[Asia Economy Reporter Dongwoo Lee] The Korea Chamber of Commerce and Industry (KCCI) expressed on the 7th that it is "very regretful" about the possibility that the National Assembly's standing committee may unilaterally pass the amendments to the Commercial Act and the Fair Trade Act.

In a statement released that afternoon, KCCI argued, "In particular, the Commercial Act is not a political bill, and since it is expected to have a serious impact on corporate management, it is difficult to agree that it must be handled in this manner."

Earlier, KCCI had appealed to the legislature to exercise caution in legislating provisions such as ▲separate election of audit committee members under the Commercial Act ▲multiple derivative suits ▲strengthening internal transaction regulations under the Fair Trade Act ▲and abolition of the exclusive prosecution system.

KCCI lamented, "It seems that these points were not properly discussed or reflected," and expressed a sense of futility and helplessness, saying, "As an economic actor, we wonder why opinions were gathered through Democratic Party TF-centered forums and other discussions until now."

It added, "When legislating a bill, we must not only consider the necessity of legislation but also review whether the legislative content will have adverse effects on the field, and if adverse effects are expected, supplementary measures should be prepared," appealing to reflect at least minimal corporate opinions.

Regarding the separate election of audit committee members in the Commercial Act amendment, KCCI stated, "The government proposal is an excessive legislation that undermines the foundation of the stock company system, which allocates shareholder rights according to the number of shares, and we ask you to recognize that it could effectively hand over director appointment rights to speculative funds, seriously impacting corporate management." It urged, "If the task is to enhance the effectiveness of the audit committee system, please consider other alternatives, and please do not damage the basic principles of shareholder capitalism."

On the multiple derivative suits system, it emphasized, "The government proposal sets the litigation qualification requirement for parent company shareholders at a shareholding ratio of 50% or more, which raises issues such as potential conflicts of interest among shareholders," and urged, "Please significantly raise the shareholding ratio requirement."

Regarding the strengthening of internal transaction regulations in the Fair Trade Act amendment, KCCI warned, "If legislated as is, it will cause serious handicaps in management efficiency, security, and urgency for our companies competing with global firms. If withdrawal is difficult, please at least prepare minimal alternatives," and repeatedly appealed, "Please recognize exceptions at least for holding companies, which the government has encouraged to introduce for the purpose of enhancing corporate transparency and as a model of advanced countries."

Finally, on the abolition of the exclusive prosecution right system, it stated, "Since this issue should be discussed together with the bill adjusting investigative authority between the police and prosecution, we ask for the legislation to be deferred."

KCCI concluded, "Despite the difficulties caused by the COVID-19 economic crisis, our business community is striving for sustainable economic growth and job creation. We will also do our best for social recovery, including the advancement of corporate governance and the establishment of a fair trade culture," and appealed earnestly, "In a situation where the global industrial landscape is rapidly changing, we sincerely ask our society and the National Assembly to help companies fulfill their roles."

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