The Korea Listed Companies Association (KLC) expressed regret on the 13th regarding the passage of the amendment to the Commercial Act in the National Assembly's plenary session and called for the exercise of the right to demand reconsideration.
The KLC noted in a statement, "The business community has pointed out the issues with the amendment to the Commercial Act and requested improvements, but it is devastating that the bill passed without adequately reflecting the opinions of corporations."
It continued, "The amendment to the Commercial Act includes elements that could lead to uncertainty in corporate management rights and a contraction in management activities," adding, "In a global environment where protectionism is expanding and uncertainties are increasing, it is apparent that this will lead to the loss of future growth drivers for our corporations."
The amendment to the Commercial Act primarily aims to extend the duty of loyalty of directors to shareholders. The KLC has asserted that there are issues with the amendment to the Commercial Act for several reasons: ▲ that Korea has a large proportion of individual investors, particularly a significant number of short-term shareholders, making it virtually impossible to seek the common interests of shareholders, ▲ that there is a risk of abuse in lawsuits and criminal complaints against directors, and ▲ that the attractiveness of listing on the domestic securities market is diminishing.
The KLC also expressed concern that excessive regulations could infringe upon the management autonomy of small and medium-sized enterprises, causing them to regress into small businesses. It stated, "The amendment to the Commercial Act is a product of political opportunism that does not sufficiently consider the characteristics and realities of our industries and capital markets."
The KLC requested, "The acting president should exercise a veto on the amendment to the Commercial Act to ensure that the opinions of corporations are adequately reviewed and reflected."