The People Power Party has shifted its position, deciding to proactively review the amendment to the Commercial Act, which focuses on the duty of loyalty of directors to shareholders, promoted by the government and the Democratic Party of Korea. The People Power Party has opposed the amendment to the Commercial Act, citing concerns about the chilling effect on corporate management due to excessive lawsuits.
Song Eon-seok, the floor leader of the People Power Party, met with reporters after a meeting of party members at the National Assembly on the 30th and stated, "Considering the recent issues related to the infringement of shareholder rights during the capital increase process of some corporations and changes in market conditions, we have decided to review the amendment to the Commercial Act proactively."
Regarding the background for deciding to review the amendment to the Commercial Act, Song said, "We have been responding with the revision of the Capital Market Act as an alternative, but there have been concerns that the Capital Market Act alone cannot sufficiently protect shareholder value in light of certain corporate behaviors."
However, he emphasized, "The current strengthening of the amendment to the Commercial Act being unilaterally pursued by the Democratic Party raises concerns that it may act as excessive regulation on private corporations, potentially depressing corporate activities and negatively impacting the overall capital market."
The floor leader also remarked, "We must also promote tax reforms that can provide practical incentives to both corporations and investors alongside the amendment to the Commercial Act," adding, "A comprehensive approach is needed for market trust recovery and enhancing corporate competitiveness, rather than just strengthening regulations."
Within the People Power Party, opinions have emerged calling for the amendment to the Commercial Act as some corporations have been issuing treasury stocks as exchange bonds (EB) and forcibly carrying out large-scale capital increases without considering minority shareholders.
At the same time, Choi Eun-seok, a deputy floor leader of the party, referred to the issuance of EB by Taekwang Industrial and the capital increase case of Hanwha Aerospace, stating, "It cannot be overlooked that the wrongdoing of a few corporations undermines the trust of the entire market and ultimately leads to discussions about amending the Commercial Act," adding, "Large shareholders of major corporations must now clearly recognize that what is more important than control is the trust of the market and shareholders."