Forum on Commercial Law Amendments Attended by Lee Yong-woo, Deputy Prime Minister for Economic Affairs, and Financial Supervisory Service

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The Korea Corporate Governance Forum held a seminar on the amendment of the Commercial Act (duty of loyalty of directors), attracting attention with the attendance of officials from economic ministries, the Financial Supervisory Service (FSS), and former members of the National Assembly. This is interpreted as reflecting the increased interest following FSS Governor Lee Bok-hyun's mention of the 'abolition of breach of trust charges' in relation to the amendment of the Commercial Act.

According to industry sources on the 20th, the Korea Corporate Governance Forum held a seminar in Yeouido, Seoul, on the theme of 'Value Up and Duty of Loyalty of Directors.' Attendees included former Democratic Party member of the National Assembly Lee Yong-woo, aide Kim Sung-young, the FSS Legal Office, and officials from the Office for Government Policy Coordination.

In particular, the attendance of government and regulatory officials has been interpreted as a sign of a whole-of-government commitment to the amendment of the Commercial Act. It is also known that FSS Governor Lee Bok-hyun showed interest in this forum. Three officials from the FSS who review legal issues related to the amendment of the Commercial Act were present at the seminar.

Former Democratic Party member Lee Yong-woo also appeared and urged the amendment of the Commercial Act by sharing an anecdote with Governor Lee. Lee said, "Previously, the FSS Governor mentioned that the duty of loyalty of directors should include the interests of shareholders," adding, "In January this year, the President also said that proportional shareholder interests should be included, and Economic Deputy Prime Minister Choi Sang-mok is also stepping forward," emphasizing the need for the amendment of the Commercial Act.

In March 2022, former member Lee proposed an amendment to the Commercial Act adding 'proportional shareholder interests' to the duty of loyalty of directors. He is well known as the first legislator to publicly discuss the issue of amending the Commercial Act in the National Assembly. Aide Kim Sung-young, who was his aide at the time, also attended. Kim is currently working in the office of Democratic Party member Jeong Jun-ho, who has been consecutively proposing amendments to the Commercial Act.

Aide Kim stated that instead of abolishing breach of trust charges under criminal law, consideration should be given to introducing the 'Majority of Minority rule.' The Majority of Minority rule is a system that requires the majority consent of minority shareholders, excluding special related parties (a concept including controlling shareholder families and affiliates), for internal transactions or remuneration involving private interests at the shareholders' meeting. He argued for partially accepting the business community's opinion by codifying that obtaining the majority consent of minority shareholders would be a ground for exemption, thereby avoiding breach of trust lawsuits.

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