I Bok-hyeon, Head of Financial Supervisory Service: “No Going Back”
I Bok-hyeon, the head of the Financial Supervisory Service in Korea, reiterated his opposition to exercising the right to request a re-vote if the amendment to the Commercial Act, which passed the National Assembly’s Legislation and Judiciary Committee, passes the main vote. He stated that he would “bet his position on opposing” such a move.
During a discussion held at the Korea Economic Association Conference Center in Yeouido, Seoul, on March 13, I Bok-hyeon mentioned that while no law is without side effects, it is questionable whether it would be productive to revert the progress made toward enhancing shareholder value.
He emphasized that even if there are issues with the amended Commercial Act, rather than proposing to exercise the right to re-vote, the focus should be on minimizing side effects, even if the law is passed in an inadequate form. Reverting to previous stages is not considered the best option at this point.
To protect shareholder value, amendments to the Capital Markets Act might be more practical. However, reverting the institutional improvement processes that have been pursued up until now is not an option. Instead of sending the amended Commercial Act back to the National Assembly, the approach should be to address concerns, such as abolishing the special breach of trust crime or establishing guidelines, and amending the Capital Markets Act to mitigate risks.
The amendment to the Commercial Act, which passed the National Assembly on the 26th of last month, expands the fiduciary duty of directors to include ‘shareholders’ beyond just the company.
I Bok-hyeon continues to assert that amending the Capital Markets Act is more appropriate under the current circumstances. He highlighted the need to eliminate the special breach of trust crime or provide guidelines to improve clarity and predictability, preventing excessive criminal judgments on corporate management decisions.