The People Power Party raised opposition to strengthening the National Pension Service's exercise of voting rights, which the government and the ruling party are pushing, calling it a "transition to anti-constitutional pension socialism."
Rep. Yu Sang-beom, the People Power Party's senior deputy floor leader for operations, and the Movement Against Pension Socialism jointly held a forum titled "Constitutional issues in the National Pension Service's exercise of voting rights" at the National Assembly on the 26th. The forum was held to voice concerns about strengthening the NPS's exercise of voting rights under the Lee Jae-myung administration and to prepare policy alternatives.
People Power Party floor leader Song Eon-seog said, "Because the National Pension Service is large, if it becomes involved in decision-making, it can in effect control all corporations. If a government that has seized the NPS sets its mind to manipulating voting rights at private companies, the free market economic order will completely collapse," adding, "The NPS has lately shown a growing tendency to get more deeply involved in decision-making, and it is a dangerous idea."
Rep. Yu, who organized the forum, said, "The president said, 'There is no market that defeats the government.' We feel a sense of crisis to the point that it could be called a declaration of government-controlled finance," adding, "The NPS often intervenes in the market. It is an openly acknowledged fact, though not announced by the government, that the NPS was used to defend the exchange rate at the end of the year. As the pension fund becomes the No. 2 or No. 3 shareholder of major corporations, there are concerns about what role it will play under cumulative voting."
Choi Hwan-yeol, head of the Korea Financial Markets Institute, who delivered the keynote presentation, said, "Since the Moon Jae-in administration in 2017 codified the exercise of voting rights, the NPS's exercise of voting rights over private companies has taken place every year," adding, "It participates in the shareholder meetings of roughly 600 companies and exercises voting rights every year, which is an act that squarely violates Article 126 of the Constitution (ban on nationalization of private companies)."
He said, "As the NPS combines with institution-only private equity funds, a structure has formed in which listed companies with weak ownership structures automatically lose management control," and suggested, "There is a need to pursue a constitutional complaint and legislation that restricts the NPS's exercise of voting rights."
In the ensuing expert discussion, Hong Eun-pyo, former professor of economics at Sangmyung University, said, "As the NPS's alternative investments increase and private equity funds expand, information asymmetry over investment destinations and risk indicators can grow," adding, "If disclosure blind spots arise, such as partitioning acquisitions at around the 0.9% level, there is a possibility of governance distortion." He proposed ▲ stronger information disclosure ▲ guidelines on overlapping investments ▲ improvements to performance fee structures ▲ and advance reviews of potential market shocks in the exit process.
Jeong Gwan-yeol, a former vice president of Samsung Electronics, referring to the so-called "Samsung Life Insurance law," said it is "a law that arbitrarily dismantles the Samsung Group," arguing, "If companies are forced to sell shares exceeding 3% of total assets, overhang concerns that 'someday shares will hit the market' will weigh on stock prices, and both retail investors and the NPS will bear the value decline."