The economic community, including the Korea Enterprises Federation, Korea Chamber of Commerce and Industry, Korea International Trade Association, and Korea Employers Federation, have expressed serious concerns on the 14th regarding the Democratic Party’s adoption of an amendment to the Commercial Act aimed at strengthening corporate governance regulations. They warned that the amendment could become a ‘law encouraging predatory tactics’ that facilitates foreign speculative capital in seizing control of domestic companies.
Following the statement, eight economic organizations, including the Korea Enterprises Federation, Korea Chamber of Commerce and Industry, Korea International Trade Association, Federation of Small and Medium-sized Enterprises, Korea Employers Federation, Korea Mid-market Enterprise Federation, Korea Listed Companies Association, and KOSDAQ Association, criticized the hasty amendment of the Commercial Act, stating it could increase management risks for domestic companies.
These organizations expressed concerns that impulsive changes could lead to a surge in lawsuits against directors, potentially being exploited by foreign speculative capital to weaken domestic companies’ competitiveness significantly. They cautioned that this might result in delays in decision-making processes, hindering new industry ventures and stifling corporate growth as speculative capital intensifies its control attacks.
They argued that weakening corporate competitiveness would exacerbate the “Korea discount” (the undervaluation of the Korean stock market), adversely affecting good-willed investors and leading to a national wealth outflow, posing a burden on the economy and its people.
The organizations further diagnosed that the Korean economy faces a severe crisis amid increasing external uncertainties due to the rise of protectionism and escalating US-China tensions, coupled with the domestic challenges of lacking new growth engines, weakened competitiveness in key manufacturing industries, and prolonged sluggish domestic demand.
They emphasized that now is the time to create a business environment that allows corporations to invest freely by exercising entrepreneurial spirit, rather than discussing strengthening governance regulations that could stifle corporate growth ambition. They urged the National Assembly to focus on uniting efforts to overcome tough economic conditions rather than deliberating on amendments to the Commercial Act.