'3% Rule Relaxation' Amendment to the Commercial Act Passed in the Legislation and Judiciary Committee Plenary Meeting... People Power Party Protest Demonstration

People Power Party Lawmakers "Party That Rose by Dictatorship Falls by Dictatorship"
Yun Ho-jung "Not a Single Stroke of the National Assembly Act Violated"

Joo Ho-young, floor leader of the People Power Party, is blocking Yoon Ho-jung, chairman of the Legislation and Judiciary Committee, from passing the amendment to the Corruption Investigation Office Act during the full committee meeting held at the National Assembly on the 8th. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Lim Chun-han] The amendment to the Commercial Act, one of the 'Fair Economy 3 Acts' promoted by the Democratic Party of Korea, passed the National Assembly's Legislation and Judiciary Committee on the 8th.

The Legislation and Judiciary Committee held a plenary meeting in the afternoon and approved the amendment to the Commercial Act amid fierce protests from the People Power Party members. The People Power Party members of the committee did not participate in the vote in protest against the passage of the High-ranking Officials' Crime Investigation Office (PCC) Act.

The core of the amendment to the Commercial Act is that listed companies must elect at least one audit committee member separately from the directors, and at this time, the voting rights of the largest shareholder are limited to 3%. The business community has strongly opposed this, citing concerns over shareholder rights infringement and the potential misuse by speculative forces. To address some of these concerns, during the National Assembly discussions, the rule was relaxed so that when appointing an outside director as an auditor, the shares of the largest shareholder and related parties are not combined, and each is individually granted a 3% voting right.

A 'multiple derivative lawsuit system' will also be newly established, allowing parent company shareholders to file derivative lawsuits against subsidiary directors. The qualification for filing lawsuits has been raised for listed companies to shareholders holding at least 0.5% of shares, higher than the government's original proposal of 0.01%. For unlisted companies, the qualification remains at 1% shareholding as per the government proposal.

Democratic Party lawmaker Baek Hye-ryun said, "Since the Commercial Act applies to all companies, we considered the aspect of mitigating the impact. For medium-sized and venture companies, responses may not be well-prepared, so we slightly relaxed the rules."

People Power Party members protested in the committee meeting room holding placards and shouting slogans such as "A party that rose through dictatorship will fall through dictatorship." Yoon Ho-jung, chairman of the Legislation and Judiciary Committee, responded, "This is a direct violation of the National Assembly's Advancement Act. Leader Joo Ho-young and People Power Party members, please leave. We may continue to request order maintenance. We have not violated a single stroke of the National Assembly Act." Chairman Yoon sharply criticized, "Those who have enjoyed the sweetness of dictatorship all their lives and now accuse the opposing party of dictatorship are truly exhibiting a dogmatic attitude."

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