Passage of the 'Three Economic Laws' in National Assembly Plenary Session... 3% Rule Relaxed, Exclusive Prosecution Rights Maintained (Comprehensive)

Financial Group Supervision Act, Strengthening Regulations on Disclosure and Financial Soundness

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[Asia Economy Reporter Lim Chun-han] The Democratic Party of Korea's proposed "Economic 3 Laws" (Commercial Act, Fair Trade Act, Financial Group Supervision Act) have passed the plenary session of the National Assembly. These bills are both the Democratic Party's general election pledges and key national agenda items of the Moon Jae-in administration.

On the 9th, the National Assembly approved an amendment to the Commercial Act, which partially relaxes and introduces the so-called "3% rule," during the plenary session. The amendment was passed with 154 votes in favor, 86 against, and 35 abstentions.

The amendment to the Commercial Act requires listed companies to elect at least one auditor separately from directors, limiting the voting rights of the largest shareholder to 3% in this election. However, when appointing an outside director as an auditor, the combined shares of the largest shareholder and related parties are not aggregated, and a 3% voting right is recognized individually. A "multiple derivative suit system" will also be established, allowing parent company shareholders to file derivative lawsuits against subsidiary directors.

The amendment to the Fair Trade Act was passed with 142 votes in favor, 71 against, and 44 abstentions. The amendment primarily expands the scope of regulations on large corporations' "preferential treatment of affiliated companies" and doubles the fines. However, the exclusive prosecution rights of the Fair Trade Commission, a key issue, were maintained considering opposition from the business community.

The Financial Complex Corporate Group Act (Financial Group Supervision Act) passed with 181 votes in favor, 68 against, and 20 abstentions. This law defines large conglomerates such as Samsung and Hyundai Motor, which operate two or more financial companies with assets exceeding 5 trillion won, as financial complex corporate groups, strengthening regulations related to reporting, disclosure, and financial soundness.

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