Ministry of SMEs and Startups Reports to Transition Committee Today... Focus on 'Loss Compensation, Ukraine, Dual-Class Shares'

President-elect Yoon Suk-yeol [Image source=Yonhap News]

[Asia Economy Reporter Choi Dong-hyun] The Ministry of SMEs and Startups will report its work to the Presidential Transition Committee on the 24th.

According to the Transition Committee and related ministries, at 10 a.m. on the day, the Ministry of SMEs and Startups will present its work report to the Economic Subcommittee 2 of the Transition Committee. The Transition Committee had previously requested the ministry to report on its major tasks, evaluations of key policies over the past five years, plans to address major issues and risks, and the implementation plan for President-elect Yoon Seok-yeol’s pledges.

The ministry is expected to focus its report on urgent issues such as compensation for losses suffered by small business owners due to COVID-19 and the damage to SMEs caused by the Ukraine crisis.

Compensation for losses to small business owners is a core pledge of President-elect Yoon. During the recent presidential election, he emphasized securing more than 50 trillion won in fiscal funds to compensate small business owners and self-employed individuals who suffered losses due to COVID-19 quarantine measures.

Regarding the Ukraine crisis, the Ministry of SMEs and Startups has formed an 'Emergency Response Task Force (TF) for the SME Sector' together with the Korea Federation of SMEs and others to respond. According to a recent survey conducted by the TF targeting 368 SMEs, 75% reported being affected by the Ukraine crisis. Among them, 46% cited 'payment disruptions' as the most common issue, followed by logistics difficulties (29.3%) and export contract suspensions (25.7%). The report is expected to focus on these SME damage situations and necessary countermeasures.

Issues long demanded by the venture and startup sectors are also expected to be included in the report. A representative example is the plan to expand the mother fund and the private investment-led technology startup support program 'TIPS'. President-elect Yoon previously pledged to double the size of the mother fund to revitalize private investment.

Additionally, the report is likely to include the introduction of multiple voting rights, a long-standing wish of the venture industry. Multiple voting rights is a system that allows founders and CEOs of unlisted venture companies to exercise voting rights exceeding their shareholdings. This is necessary to secure defensive rights because founders’ shares tend to decrease during external investment rounds, exposing them to hostile mergers and acquisitions (M&A).

The amendment to the 'Special Measures for the Promotion of Venture Businesses Act' (Venture Business Act), which allows founders to have up to 10 votes per share, passed the National Assembly’s Industry, Trade, Energy, SMEs and Startups Committee at the end of last year but is still pending before the Legislation and Judiciary Committee.

A government official stated, "The report will cover urgent issues such as compensation for small business owners and the Ukraine crisis, as well as various problems raised by the SME, venture, and startup sectors over time."

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