Lee Bok-hyeon, head of the Financial Supervisory Service, directly criticized Chey Tae-won, chairman of the SK Group and the Korea Chamber of Commerce and Industry, for opposing the corporate law amendment. The amendment expands the duties of directors from being owed to the 'company' to 'shareholders,' having passed the National Assembly plenary session, but acting President Han Duck-soo exercised a veto. The business community has opposed the law, saying it would lead to an explosion of lawsuits once enacted.
On the 2nd, Lee appeared on CBS Radio's 'Kim Hyun-jung's News Show' and noted, "Chairman Chey asked, 'Do we need to amend the corporate law in this era of extreme uncertainty?' which is a valid point," but added, "For that statement to have genuineness, he should have genuinely listened to the market's shock and the voices of shareholders regarding the merger issues involving SK Innovation (and E&S)."
This statement follows remarks made by Chairman Chey during a press briefing on his four-year anniversary held at KORCHAM on the 25th of last month, where he said, "The Korean economy is in an era of extreme uncertainty due to overlapping trade and domestic political issues." At that time, Chey stated, "In this unprecedented situation, corporate decision-making is inevitably delayed, and the corporate law amendment introduces further uncertainties, raising questions about whether now is an appropriate time to implement it."
Lee stated, "The business community opposes even the milder version of the capital market law amendment, asking, 'Who can guarantee that a second LG Energy Solution incident will not occur?'" The LG Energy Solution incident refers to the situation where LG Chem's valuable battery division separated to form LG Energy Solution, causing losses for LG Chem's shareholders.
He remarked that if President Yoon Suk-yeol had been in office, he would not have exercised a veto on the corporate law amendment. Lee emphasized, "The advancement of the capital market is a key policy directly pursued by the President," asserting, "I am confident that if he were present, he would not have exercised a veto." He explained that until the second half of last year, the Ministry of Justice also expected that the President would not use the veto.
He also rebutted the main argument of the business community that 'once the corporate law amendment is implemented, directors will feel burdened in their decisions and will not be able to pursue new business ventures.' Lee explained, "While there may be losses due to a director's decision, this is fair to all shareholders," adding, "The duty of diligence operates in transactions where the merger benefits the controlling shareholders' ratio or when favorable goods are sold cheaply to companies related to controlling shareholders."
The business community's assertion that the corporate law amendment would not operate in normal management activities and that all investment would stop indicates ignorance of the law or a deliberate misrepresentation.
Lee stated that there is no conflict with Kim Byung-hwan, chairman of the Financial Services Commission. He remarked, "I have no disagreements whatsoever with the chairman, who opposed the corporate law amendment," adding, "It's a matter of reality perception." He then noted, "In a situation where the business community opposes the amendment to the capital market law and principles of shareholder protection, we need to think coolly about whether this milder law can be passed."