Amendment to the Commercial Act on 'Duty of Loyalty to Shareholders' Passes National Assembly Judiciary Committee
The 'Commercial Act Amendment Bill,' which expands the scope of the 'duty of loyalty of directors' from companies to shareholders and introduces 'electronic general meetings of shareholders,' passed the National Assembly's Legislation and Judiciary Committee on the 26th.
The Legislation and Judiciary Committee held a plenary session that day and approved the amendment bill to the Commercial Act with these provisions.
Before the vote, members of the People Power Party protested the proceedings led by Chairman Jeong Cheong-rae of the committee and others by walking out entirely and abstaining from the vote.
The opposition parties, including the Democratic Party, plan to process the amendment bill to the Commercial Act at the plenary session of the National Assembly scheduled for the 27th.
The Democratic Party's determination to pass the amendment bill is known to be firm. On the morning of the same day, Lee Jae-myung, leader of the Democratic Party, emphasized, "This is the first step toward making the Korean stock market an advanced capital market," and noted that President Yoon Seok-yeol, former People Power Party leader Han Dong-hoon, and Lee Bok-hyun, Governor of the Financial Supervisory Service, have also expressed the necessity of the amendment to the Commercial Act."
On the other hand, the ruling party and the business community oppose the amendment to the Commercial Act. The People Power Party evaluates the amendment bill as anti-business and anti-market legislation, and the business community expresses concerns about the proliferation of lawsuits against directors and threats to corporate management rights.
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Even if the bill is passed in the plenary session, the ruling party plans to request Acting President and Deputy Prime Minister for Economy and Minister of Strategy and Finance Choi Sang-mok to exercise the right to request reconsideration (veto power).
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