Seoul: The National Assembly has passed a significant revision to the Commercial Act, expanding the fiduciary duty of corporate directors to include shareholders, aiming to enhance the protection of minority shareholders' rights. The amendment was passed during a plenary session with a vote count of 184-91.
According to Yonhap News Agency, the newly approved amendment broadens the directors' obligation to act in good faith from solely focusing on the "company" to encompassing both the "company and its shareholders." This change is designed to address concerns about the rights of minority shareholders.
However, the ruling People Power Party (PPP) has voiced strong opposition, arguing that the revision could lead to increased legal uncertainties and elevated business operation costs. As a result, many PPP lawmakers either dissented or abstained from voting. The PPP is now urging acting President Choi Sang-mok to veto the bill.
PPP floor leader Kweon Seong-dong criticized Lee Bok-hyun, the governor of the Financial Supervisory Service (FSS), for his opposition to Choi's potential veto. Kweon stated, "It is inappropriate for the head of the FSS, who is not even a Cabinet member, to make such remarks on a matter unrelated to his jurisdiction."
Businesses have also echoed the PPP's concerns, arguing that the amendment could negatively impact the country's economic competitiveness and exacerbate the current economic downturn. Acting President Choi Sang-mok has a 15-day window to decide whether to request a reconsideration by the National Assembly or to enact the amendment, which would then take effect one year after its promulgation.