South Korean business community welcomes rejection of Commercial Code amendment bill for second vote... ”Striving to improve confidence in capital markets”

Following the rejection of a proposed amendment to the Commercial Code that would have expanded the scope of directors' duty of loyalty to shareholders in a second vote in the South Korean National Assembly on the 17th, South Korean economic organizations have stated that they will work to improve trust in the capital markets.
Earlier that day, the National Assembly held a plenary session to vote again on the Commercial Code amendment bill. The amendment bill was rejected with 196 votes in favor, 98 votes against, 1 abstention, and 4 invalid votes, meaning the bill was automatically scrapped.
The Korean business community unanimously expressed its welcome for the move. In a statement distributed by Kang Seok-guk, head of the Korea Chamber of Commerce and Industry's research bureau, the organization said, "The reason the Commercial Code amendment bill was rejected in the National Assembly's second vote was because of the need to improve shareholder value.
"This reflects the recognition that the enhancement of corporate value should be based on strengthening a company's fundamental competitiveness," he said.
"We will actively work to build a reasonable system that can achieve both improved competitiveness and shareholder protection," the Korea Employers Federation also said, "The proposed amendment will increase uncertainty in management decisions and cause difficulties for business management.
"These results reflect concerns that the decision could cause serious confusion in the management of Korean companies," the association said. "Korean companies will make proactive efforts to protect minority shareholders and improve the credibility of the capital market in the future," it said.
"We look forward to a measured and balanced approach that reflects the competitiveness of companies and international standards in future discussions," he said.
The proposed amendment to the Commercial Code, led by the Democratic Party of Korea, South Korea's largest opposition party, is aimed at amending the Commercial Code to include provisions that would require directors to fulfill their duties of loyalty.
The main pillar of the bill is to broaden the scope of the scope from "company" to "company and shareholders." The bill also includes the mandatory introduction of electronic shareholder meetings for listed companies. The amendment bill was led by the Democratic Party and passed the Diet plenary session on the 13th of last month.
However, Prime Minister Han Deok-soo (Acting President) exercised his right to request a reconsideration (veto) on the 1st of this month. Prime Minister Han said of the Commercial Law Revision Bill, "The majority of companies, including not only large companies but also small and medium-sized enterprises,
"In a situation where this could have a major impact on the business environment and competitiveness of companies in China, we believe it is necessary to find alternatives that minimize side effects through deeper discussions," he said.
South Korean business circles have voiced opposition to the proposed amendments to the Commercial Code, arguing that the risk of shareholder litigation would make long-term investments difficult and make companies vulnerable to attacks on management control by activist funds.
I have strongly called for its withdrawal.