“Amend the Commercial Act within the regular session of the National Assembly… Seek a path to normalize the stock market.”
“Most sound companies would agree… Why does the ruling party oppose?”
Lee Jae-myung, leader of the Democratic Party of Korea, emphasized on the 6th that he hopes President Yoon Suk-yeol will make a statement on the 7th, addressing the public’s concerns and helping heal their hurt sentiments. This was in anticipation of President Yoon’s upcoming public address.
During the Supreme Council meeting held at the National Assembly, Lee announced his intention to push swiftly for an amendment to the Commercial Act. His focus is on preventing the abuse of control by major shareholders and finding ways to normalize the stock market. Lee emphasized the importance of protecting minority shareholders’ rights and ensuring they are respected as rightful owners of the companies.
Lee pointed out the necessity of fundamental solutions to activate the stock market, which he referred to as the heart of the capitalist economic system. The stock market provides opportunities for investment and capital procurement, but its lifeblood is fairness. Any manipulative or illicit activities by individuals can cause losses for the majority and lead to a general aversion to investing.
Lee blamed the unethical actions of controlling shareholders, such as stock price manipulation or profit siphoning, as major issues in the Korean stock market. He criticized methods such as creating subsidiaries or affiliated companies to conduct unfair internal transactions, depriving shareholders of dividends while improperly redistributing retained earnings.
He also pointed out that the system unjustly allows minority shareholders to be stripped of their assets during processes like mergers, acquisitions, and splits. Lee questioned the fairness of such practices, using the analogy of a cow owner losing ownership of calves.
Lee argued that it’s unreasonable for such unfair transactions, like siphoning core assets through methods like physical division, to be permissible under current laws and that these loopholes must be closed through amendments to the Commercial Act.
He expressed confidence that the amendment is something everyone desires and that most responsible businesses would support it. Lee criticized the government and ruling party for gradually expressing opposition, questioning their motives, and implying that they might benefit from the status quo.
Furthermore, Lee announced the launch of the “Task Force for Individual Investor Protection and Corporate Governance Improvement,” which aims to address issues like the exclusive control of executive appointments by major shareholders and to lead legislative efforts for necessary reforms.
Lee reiterated his commitment to creating measures to restore both domestic and international investors’ confidence in the Korean stock market, aiming for its revitalization. He emphasized his intention to achieve tangible results in normalizing the stock market and amending the Commercial Act.