With the Democratic Party of Korea forecasting the forcible handling of the amendment to the Commercial Act this week, the political spotlight is on the possibility of negotiations as the leadership of both parties engages in contact on the 1st.
The amendment to the Commercial Act pushed by the Democratic Party of Korea expands the duty of fidelity for directors from the existing 'companies' to 'companies and shareholders' and strengthens the introduction of electronic shareholder meetings. It also includes provisions for adopting a concentrated voting system for corporations with assets exceeding 2 trillion won and limiting the voting rights of major shareholders and related parties to 3% when appointing audit committee members.
The People Power Party, which has opposed the Democratic Party of Korea's amendment to the Commercial Act as a party line, recently shifted its stance toward 'discussing possibilities' under the pretext of 'enhancing shareholder value.' The People Power Party has proposed package discussions on separate taxation of dividends, tax rate reductions, and tax incentives for high-dividend corporations to the Democratic Party of Korea.
According to political sources on the 1st, Song Eon-seok, the floor leader of the People Power Party, called Kim Byeong-gi, the acting leader and floor leader of the Democratic Party of Korea, to officially propose negotiations on the Commercial Act amendment. Kim, the floor leader, said, 'I will discuss it.'
The floor leaders of both parties are scheduled to meet on this day to discuss the amendment to the Commercial Act. Moon Geum-joo, the spokesperson for the Democratic Party of Korea, stated after a party floor countermeasure meeting, '(The two floor leaders) will meet today, although the time is uncertain,' adding, 'Kim, the floor leader, has the stance that the matter will be thoroughly reviewed within the legal affairs committee regarding the amendment to the Commercial Act.'
Park Seong-hun, a spokesperson for the People Power Party, also met with reporters that day and stated, 'We will take a forward-looking stance on the party's position regarding the amendment to the Commercial Act.' However, he noted, 'The provision that expands the duty of fidelity of directors to shareholders raises significant concerns about potential litigation by the business community,' adding, 'We will do our best to prepare safety devices that can alleviate this.' He further mentioned, 'While we may accept some demands from the Democratic Party of Korea at a level where we can persuade the business community, the specific details will be determined at the negotiation table.'
However, the Democratic Party of Korea continues to adhere to its existing position of 'prior legislation, subsequent supplementation.' Jin Seong-jun, the chair of the Democratic Party of Korea's policy committee, emphasized in a radio interview that 'the amendment to the Commercial Act will be processed according to principles.' He stated, 'The fact that the People Power Party has returned to a supportive stance acknowledges that their previous opposition was merely for the sake of opposition,' adding, 'It's not time to delay even if they now say let's negotiate. We will surely process it in this week's last plenary session.'
Regarding concerns about potential litigation from the business community, Jin, the chair of the policy committee, remarked, 'It's an excessive worry,' adding, 'Even if lawsuits increase, there are established precedents that do not hold management accountable for decisions made on business judgment.' However, he noted, 'If, contrary to concerns, lawsuits do become frequent or executives are unfairly held accountable, we are willing to address that.'
On the issue of the exemption for business judgment, he explained, 'Just because it's a decision by the board of directors doesn't mean it's automatically exempt. Moving forward, shareholder interests must be considered as well, and whether this was considered fairly will become an important criterion for responsibility assessment.'
In response to the People Power Party's insistence on package processing including tax reforms, he stated, 'Tax discussions are reasonable, but they are not matters that need to be handled simultaneously right now. Once management that considers shareholder interests is established, discussions can be held if necessary.'