Amid controversies surrounding management disputes due to hostile mergers and acquisitions (M&A), claims have arisen that pension funds should exercise their voting rights in defense of economic security.
On the 8th, a forum titled 'What is the problem with hostile M&A by private equity funds?' was held at the National Assembly. Co-hosted by 13 members including Vice Chairperson Lee Hak-young, Min Byung-deok, Kang Sun-woo, Kang Jun-hyun, Kwon Hyang-yeob, Kim Nam-kun, Kim Won-hee, Kim Tae-sun, Park Sang-hyeok, Park Hee-seung, Seo Young-seok, Lee Jung-moon, Heo Seong-moo, and Shin Jang-sik from the Justice Party.
Professor Lee Jeong-hwan of Hanyang University's College of Economics and Finance, who presented at the forum, noted, "If the purpose of hostile M&A is the realization of short-term profits, there is a possibility that the focus may shift towards immediate revenue generation rather than long-term growth of corporations. This can lead to divestitures and personnel restructuring, which may negatively impact both the internal atmosphere of corporations and the local economy."
Democratic Party member Kim Nam-kun pointed out, "There are concerns that private equity funds are prioritizing cost reduction over efforts to normalize corporations, resulting in massive layoffs and maximizing short-term profits. There is a need for social control or intervention regarding the excessive involvement of private equity funds in management and the difficulties faced by economic minorities."
On that day, Commissioner Moon Byeong-guk of the Korea Zinc Labor Union also attended, mentioning the recent management dispute between Korea Zinc and MBK Partners. Moon stated, "MBK Partners and Youngpoong tell us not to worry about job security, but workers are feeling a suffocating sense of anxiety every day."
Voices regarding the strengthening of fiduciary responsibilities for the National Pension Service were also raised. Attorney Jo Hye-jin from the Legal Services Union of the Korean Confederation of Trade Unions said, "Last year, the National Pension Service selected MBK as a private equity fund management company with a scale of 1.55 trillion won in the first half of the year, leading to criticism that the National Pension cannot be considered to have taken public interest into account. There is a need to further enhance the public nature of public funds."
Emeritus Professor Choi Joon-seon of Sungkyunkwan University Law School stated, "In 2016, when a U.S. corporation acquired the Canadian aerospace company MDA, the Canada Pension Plan Investment Board (CPPIB) blocked MDA's overseas sale. Considering the ripple effects on the national economy and financial markets, pension funds should be managed accordingly, and in strategic industries with considerable importance, such as aviation, shipping, railways, and defense, the National Pension Service should play a certain role in upholding economic security."