Major conglomerates express concerns over proposed Commercial Act amendment

Nov 22, 2024, 10:49 am

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(From left in the front row) LG President Cha Dong-seok, Hanhwa President Shin Hyun-woo, Pungsan Vice Chairman Park Woo-dong, SK Chairman Lee Hyung-hee, Federation of Korean Industries (FKI) Vice Chairman Kim Chang-beom, Samsung Electronics President Park Seung-hee, Hyundai Motor Vice President Kim Dong-wook, Lotte Vice Chairman Lee Dong-woo, and CJ President Huh Min-hoe announce an emergency statement for the rejuvenation of the South Korean economy at the Lotte Hotel in Seoul on Nov. 21, 2024./ Source: FKI

AsiaToday reporter Kim Han-seul

South Korean conglomerates called for support of the National Assembly, the government, and the people to recover the weak economic sentiment.

The top executives of 16 major Korean conglomerates, including Samsung, SK, Hyundai Motor and LG, on Thursday issued an urgent joint statement opposing a proposed revision to the Commercial Act, which aims to increase the duties of corporate board members. They formed a consensus on the economic crisis and asked the National Assembly to legislate to “revive the economy” instead of imposing regulations.

According to the Federation of Korean Industries (FKI) on Thursday, the heads of 16 conglomerates, including Samsung Electronics President Park Seung-hee, SK SUPEX Council Communications Director Lee Hyung-hee, Hyundai Motor Vice President Kim Dong-wook, and LG President Cha Dong-seok, issued the joint statement at the Lotte Hotel in Seoul. It is extremely rare for major conglomerate executives to issue an urgent statement.

The executives expressed concerns over the domestic economy at a time when the economic growth rate remains at around 2 percent, while vowing to set an example in the business circle first to make a leap forward through aggressive search for new businesses and job creation.

They called for active support of the National Assembly and the government. They urged the National Assembly to stop regulatory legislation such as amendments to the commercial law. The opposition from the business community is growing as the main opposition Democratic Party (DP) recently proposed a revision to the commercial law that aims to extend directors’ fiduciary duty beyond the company’s board of directors to shareholders. The executives pointed out that the amendment to the commercial law will make it difficult for the board of directors to engage in normal management activities and hinder the discovery of new growth engines due to excessive lawsuits and attacks from overseas speculative capital.

“I hope that everyone looks back at why the 16 South Korean conglomerate executives have come together to issue the collective statement,” said Kim Chang-beom, vice chairman of the FKI. “It is questionable whether it is urgent to think about the revision of the commercial law at this point.”

The executives also asked the government to push for drastic regulatory reforms to revitalize the economy and to spare support for sectors involving AI, semiconductor, secondary batteries, and mobility.

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