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Business District Before the ordinary parliamentary session in November, he then called on the National Assembly to oppose the amendment of the Trade Act, which aims to reorganize the corporate governance structure.
On 4 May, KEF announced on 4 June that it had delivered its opinion on the "draft law amending commercial law" to the Judiciary Committee of the National Assembly. Currently, the pending amendment to the National Assembly consists of appointing a separate member of the Audit Committee, imposing a cumulative voting system, introducing multiple representation and imposing electronic voting.
The amendment to the Commercial Law contains the intention to strengthen and strengthen the powers of minority shareholders to introduce and strengthen a system to control family members and major shareholders and to to ask for management responsibilities.
The KEF pointed out that this amendment could threaten corporate control and that it should be carefully considered and legalized as a means of defending the rights of management. KEF said: "The capital market is opening up quickly and the means to defend the management rights available to Korean companies are very weak." We have already experienced the side effects of mbadive spillovers and management intervention,.
In the amendment, the separation of the members of the audit committee refers to the appointment of an independent auditor who does not elect an auditor among the directors elected by the majority shareholder. Currently, the voting rights of the majority shareholder are limited to 3%. KEF has expressed concern that major shareholders are too small and that funds and institutional investors are likely to have greater influence. In particular, foreign speculative capital, which threatens national corporate governance rights, will likely be used to strengthen the influence.
The concentrated voting system gives shareholders voting rights equal to the number of directors to be elected at the shareholders' meeting. Under current law, more than 1% of publicly traded companies with more than 2,000 billion shares may request a concentrated vote at the time of appointment of two or more shareholders. However, the articles of badociation of the company can exclude it.
The KEF stressed that minority shareholders can only seek the interests of the group, not the entire society, if the votes are selected and supported by specific forces. A KCTU official said: "The compulsory voting system can lead to management conflicts, and the United States and India, which had made it mandatory in the past, also adopted a method of voting. random selection. "
The KEF is also concerned about multiple lawsuits involving multiple shareholders, whereby the shareholder of the parent company may bring an action for liability against the subsidiary, and the mandatory electronic voting whereby the shareholders' meeting is held electronically. "The excessive involvement of the parent company in the independence of the subsidiary" We are convinced that we are vulnerable to the risks of pseudo-distortion, hacking and error by shareholders. "
The KEF stressed that a "careful review" of ongoing reforms is needed and that it is necessary to legislate on management rights advocacy measures, such as the "differential voting right" and the "poison pill".
Differential voting rights are one of the means of defense of management rights because they confer voting rights on specific shares rather than participations. Poisonfill is a system that gives existing shareholders the right to buy shares at a price lower than the market price in the event of an attempted takeover or merger.
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