Business Community's Final Appeal Ahead of 'Commercial Act and Fair Trade Act Amendment' Processing

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is attending the '2021 Economic Policy Direction Meeting with Economic Organization Leaders' held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, on the 4th, along with Park Yong-man, Chairman of the Korea Chamber of Commerce and Industry, Son Kyung-sik, Chairman of the Korea Employers Federation, Kim Ki-moon, Chairman of the Korea Federation of Small and Medium Business, and Kang Ho-gap, Chairman of the Korea Federation of Mid-sized Enterprises. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kiho Sung] The business community has once again expressed concerns ahead of the National Assembly's passage of amendments to the Commercial Act and the Fair Trade Act.

On the 8th, six economic organizations issued a joint statement in the name of their heads, stating, "We have actively conveyed the business community's concerns and positions through official meetings and public hearings with the ruling party regarding the amendments to the Commercial Act and the Fair Trade Act, as well as through various discussions with lawmakers from both ruling and opposition parties. The ruling party has also listened and expressed intentions to consider not imposing difficulties on companies. However, the business community cannot help but feel deep concern and bewilderment as the bill, which hardly reflects the core demands of the business sector, is being pushed for passage almost solely by the ruling party and in a surprise manner."

The organizations participating in this statement include the Korea Employers Federation (Chairman Son Kyung-sik), the Korea Federation of SMEs (Chairman Kim Ki-moon), the Korea International Trade Association (Chairman Kim Young-joo), the Korea Federation of Medium-sized Enterprises (Chairman Kang Ho-gap), the Korea Listed Companies Association (Chairman Jung Goo-yong), and the KOSDAQ Association (Chairman Jung Jae-song).

Currently, in the National Assembly, the amendment to the Commercial Act, which focuses on strengthening the appointment of audit committee members and introducing multiple derivative lawsuits, and the amendment to the Fair Trade Act, which includes expanding the scope of internal transaction regulations and raising the mandatory shareholding ratio for holding companies, are each on the verge of passing their respective standing committees.

The economic organizations stated, "Matters such as separate appointment of audit committee members and voting restrictions, introduction of multiple derivative lawsuits, abolition of exclusive prosecution rights, expansion of internal transaction regulation targets, and raising the mandatory shareholding ratio for holding companies not only shake the foundation of corporate governance systems but also lead to excessive litigation and impose significant constraints on strategic business initiatives. Therefore, the business community earnestly requests that the National Assembly suspend the current legislative process for these basic corporate governance laws, which are also of low urgency, and conduct a thorough re-examination in the relevant standing committees to reflect alternatives that can accommodate the business community's positions as much as possible."

They added, "Our business community will continue to evolve transparent management by further improving governance and will take the lead in overcoming the current economic and employment crisis caused by COVID-19, as well as in expanding investments and pioneering management strategies to strengthen international competitiveness."

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