The amendment to the Commercial Act, which includes the mandatory implementation of the concentration voting system and the expansion of separate elections for audit committee members, has passed through the subcommittee of the Legislation and Judiciary Committee, led by the Democratic Party of Korea. The Democratic Party plans to address the amendment at the full meeting of the Legislation and Judiciary Committee on the 1st of next month.
The Bill Review Subcommittee of the Legislation and Judiciary Committee held a meeting at the National Assembly on the afternoon of the 28th and approved the amendment to the Commercial Act with only the ruling party's votes. Members of the opposition, the People Power Party, left the vote in protest against the Democratic Party's unilateral processing. The supplementary legislation of the amendment to the Commercial Act has passed through the subcommittee 25 days after the bill regarding the duty of care for directors to shareholders was processed in the plenary session of the National Assembly.
This amendment mandates the concentration voting system for listed companies with assets of over 2 trillion won and expands the number of separately elected audit committee members from 1 to at least 2. The concentration voting system allows minority shareholders to cast votes equal to the number of directors they intend to elect per share, enabling focused voting on specific candidates. Earlier, the Democratic Party of Korea had rapidly pushed for supplementary legislation for the amendment to the Commercial Act, but at the beginning of this month, it decided to gather additional public opinion.
Kim Yong-min, a Democratic Party of Korea lawmaker and the ruling party's secretary of the Legislation and Judiciary Committee, noted, "We have sufficiently discussed the amendment to the Commercial Act through seven subcommittee meetings and two public hearings, and I judged that there was no longer a situation to delay it," adding, "We will ensure the fairness and transparency of the capital market so that Korea's stock market receives proper evaluations."
He emphasized, "With the Yoon Suk-yeol administration under investigation for stock price manipulation involving SAMBU Construction, even the Minister is facing scrutiny, and this is a major cause of the opacity in Korea's capital markets and the 'Korea discount (undervaluation of the domestic stock market).'"
On the other hand, the People Power Party condemned the Democratic Party of Korea's unilateral handling of the amendment to the Commercial Act. After the meeting, People Power Party lawmaker Jang Dong-hyuk met with reporters and said, "There are many concerns that if we expand the separate election of audit committee members or introduce the concentration voting system, our corporations will lose management rights due to foreign capital, but the Democratic Party is not having any discussions about it."
He continued, "Without proper tariff negotiations taking place, the business sector is seriously concerned, and in fact, it's almost close to panic," asserting, "In such a situation, how can our corporations engage in business activities in Korea?"