[2024 National Audit] Lee Bok-hyun "Will Find a Reasonable Point for Commercial Act Amendment"

National Assembly Political Affairs Committee Financial Supervisory Service Audit

Lee Bok-hyun, Governor of the Financial Supervisory Service, is responding to a lawmaker's question during the National Assembly's Political Affairs Committee's audit of the Financial Supervisory Service held on the 17th. Photo by Kim Hyun-min

Lee Bok-hyun, Governor of the Financial Supervisory Service, expressed sympathy on the 17th regarding concerns from the business community over the amendment to Article 382-3, Paragraph 3 of the Commercial Act concerning the 'duty of loyalty of directors,' stating, "We will find a reasonable point."

Governor Lee made this remark during the National Assembly's Financial Services Committee audit in the morning, responding to the criticism from Yoon Han-hong, a member of the People Power Party and chairman of the Financial Services Committee, who said, "The investment momentum of large corporations for the future could weaken." Governor Lee has actively voiced the necessity of amending the Commercial Act in official settings.

The financial authorities have been preparing the amendment to the Commercial Act in collaboration with related government departments such as the Ministry of Economy and Finance and the Ministry of Justice. Minority shareholders and activist funds have argued that shareholders outside the company should be added to the scope of the 'duty of loyalty of directors' under Article 382-3 to strengthen shareholder protection. However, the business community has opposed this, citing concerns about being subjected to breach of trust lawsuits and potential infringements on management rights.

Governor Lee said, "There is a strong awareness within the government that we must not hinder the proactive entrepreneurial spirit of those who have led companies with a sense of ownership, and that if current issues such as group restructuring are not resolved within a short period of 5 years or at most 10 years, future industrial restructuring will be difficult."

He added, "However, we are considering various ways, including the Ministry of Economy and Finance, the Ministry of Justice, the Financial Services Commission, and ourselves, to harmonize these diverse values. Since we fully empathize with the points raised by the chairman, we will strive to find a reasonable point."

Chairman Yoon Han-hong pointed out, "There are slight differences in opinions between the Ministry of Justice and the Deputy Prime Minister for Economy regarding the duty of loyalty of directors, and there are significant differences in views within the political and academic circles. Therefore, a cautious approach is necessary."

He continued, "While it is argued that our large corporations have sometimes harmed minority shareholders during mergers, restructuring, or spin-offs, there is also a public interest aspect. We need to reorganize declining industries and pursue new businesses in the global market."

He added, "Even if there are deficits, continuous investment over several years is necessary for us to gain the strength to lead the economy. If large corporations are strongly pressured by the Financial Supervisory Service, there could be obstacles to moving forward."

Chairman Yoon also emphasized, "If we only think about immediate profits, new businesses cannot be invested in with a future perspective, and currently, only large corporations are in a position to invest. Korea has grown through this, and if we apply too much pressure now, there will be no future."

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