Anchor: Proposed revisions to the Commercial Act, which the opposition is advocating with the aim of ensuring that boards of directors balance the interests of companies and shareholders, are facing a strong backlash from the business community. The opposition is suggesting an open debate to resolve the issue.
Choi You Sun reports.

Report: Revisions to the Commercial Act that the main opposition Democratic Party(DP) put forth earlier this month would require boards of directors to prioritize the interests of shareholders, in addition to companies. 

In response, the presidents of the nation’s 16 major companies issued a statement on Thursday, expressing concern that the revisions would hinder management activity and discourage companies from seeking new growth opportunities.

The 16 companies, including Samsung Electronics and SK Group, along with the Federation of Korean Industries, said the changes would expose companies to excessive litigation and attacks from speculative investors based overseas.

They raised concern about potential damage to corporate competitiveness, saying the domestic stock market could see a decline in value.

In response, DP leader Lee Jae-myung proposed an open debate on Friday, saying he intends to hear out both sides before finalizing the party’s position.

Lee emphasized that no one is against protecting small investors and there is always room for compromise when deciding what constitutes a reasonable way of guaranteeing sufficient protection.

The ruling People Power Party(PPP), for its part, reiterated a call to protect small investors’ interests by revising the Capital Markets Act rather than the Commercial Act.

PPP policy chief Kim Sang-hoon said Friday that the proposed changes to the Commercial Act, if applied to both listed and unlisted companies, would place excessive burdens on businesses.

Kim said his party thinks it would be better to revise the Capital Markets Act and have the revisions apply only to listed firms.
Choi You Sun, KBS World Radio News.