“Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, expressed reservations regarding the amendment of the Commercial Act to include shareholders in the fiduciary duty of directors, stating on the 28th that ‘there are many differing opinions among legal scholars and experts, and more discussion is needed.’
In an interview on KBS1 Radio that morning, Deputy Prime Minister Choi confirmed his firm intent to improve corporate governance for the protection of general shareholders and investors.
He explained, ‘The regulations for protecting shareholders related to mergers or physical divisions of listed companies are mainly found in capital market laws,’ and added, ‘We will soon prepare improvement measures.’
However, he kept his distance from amending the Commercial Act. Deputy Prime Minister Choi pointed out that ‘the Commercial Act affects not only unlisted companies or mergers and physical divisions but also various management activities overall,’ and emphasized the need for careful consideration due to numerous legal and managerial implications.
He further stated, ‘To prevent harm to existing shareholders in the assessment of physical divisions and merger valuations, we intend to directly amend the relevant capital market laws,’ noting that ‘there is significant disagreement among scholars and experts about including shareholders outside the company in the fiduciary duty of directors through the Commercial Act amendment.’
Moreover, he suggested, ‘It is possible to introduce standards for protecting minority shareholders directly into the capital market laws,’ and reiterated that amending the capital market laws is evidently effective, whereas the Commercial Act requires more debate and cautious deliberation.
Regarding the host’s observation that even pension funds are reducing domestic allocations due to the ‘Korea Discount’ (undervaluation of the domestic stock market), he stressed, ‘We intend to make efforts to strengthen the demand base of the capital market, including pension funds, and the government’s commitment to this is firm.'”