Latest news with #CommercialAct
Korea Herald
19 hours ago
- Business
- Korea Herald
Enhancing shareholder returns, redefining worker, employer
Proposed Bill: Partial Amendment to the Commercial Act Proposed by Rep. Cha Gyu-geun (Rebuilding Korea Party) ● This bill seeks to enhance shareholder returns by requiring companies to cancel treasury shares within six months of acquisition and prohibiting the allocation of new shares to treasury stock in the event of an equity spinoff. Proposed Bill: Partial Amendment to the Commercial Act Proposed by Rep. Kim Tae-nyeon (Democratic Party of Korea) ● This bill would repeal the provision on special misappropriation, which substantially overlaps with the offense of occupational breach of trust, in order to prevent the abusive application of breach of trust charges. Pending Bill: Partial Amendment to the Trade Union and Labor Relations Adjustment Act Proposed by Rep. Lee Yong-woo (Democratic Party of Korea), Rep. Shin Chang-sik (Rebuilding Korea Party), and Rep. Jung Hye-kyung (Progressive Party) ● This bill would expand restrictions on corporate damage claims against unions and redefine 'worker' to include union organizers and members, while broadening the scope of 'employer' to include a person having de facto control over the working conditions of workers. Administrative Announcement: Partial Amendment to the Enforcement Decree of the Act on the Protection of Financial Consumers Competent Authority: Financial Services Commission ● The draft amendment would require financial companies to assess customers' loss-bearing capacity by considering factors including their investment objectives, assets, experience with investment products, understanding of financial instruments, risk tolerance, and age, when selling high-risk financial products such as equity linked securities. It would also require financial companies to provide a clear explanation of key information, including the risk of loss, prior to the sale of such products. The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. — Ed.
Korea Herald
21-07-2025
- Business
- Korea Herald
[Editorial] Corporate anxiety
DP pushing 'Yellow Envelope Law'; Corporate tax rates to be raised back Korean companies are concerned that the Lee Jae Myung administration and the ruling Democratic Party of Korea are stepping up legislation that could add to their burdens, following the revision of the Commercial Act. The revised Commercial Act proposed by the party passed the National Assembly on July 3. The revision expands the fiduciary duty of corporate board members to serve the interests not only of their companies but of shareholders as well. Business circles worry that the change could make directors avoid long-term investments because of shareholder objections. Last Friday, Democratic Party lawmakers presented a bill to revise the Labor Union Act — a proposal known as the "Yellow Envelope Law" — to the National Assembly's Environment and Labor Committee, then proceeded to forward it to the subcommittee for deliberation. The party, which has a large majority in parliament, vowed to get the bill passed in an extraordinary session of the Assembly next month. Article 2 of the Labor Union Act revision would require primary contractors to bargain collectively with the employees of subcontractors. Article 3 makes it practically impossible for companies to claim damages from workers taking industrial action. If hundreds or thousands of subcontractor employees were to demand collective bargaining, subcontractors and the large companies that outsource work to them could be mired in incessant labor disputes. The article limiting damage claims against workers could encourage more industrial action. For these reasons, former President Yoon Suk Yeol vetoed the bill twice. The deepening anxiety of companies is understandable. Koo Yun-cheol, the nominee for deputy prime minister and minister of economy and finance, mentioned the decline in corporate tax revenue during his confirmation hearing at the National Assembly last Thursday. He said he would consider restoring the higher corporate tax rates that the Yoon administration lowered. The Moon Jae-in government raised corporate tax rates to a range of 10-25 percent, then the Yoon administration eased them by 1 percentage point to 9-24 percent. Koo blamed the tax cuts for a decrease in corporate tax revenue. He argued that the tax reductions failed to have the desired effects, such as increased investment and economic growth. Corporate tax revenue decreased from 103 trillion won ($74 billion) in 2022 to 80 trillion won in 2023 and 62 trillion won in 2024. Koo is mistaken. Corporate tax revenue did not shrink by 41 trillion won in two years because of tax rate reductions. The biggest factor was the deterioration of business performance, affected by an export slowdown and a semiconductor slump. Unless the economy improves, raising corporate tax rates will not guarantee an increase in tax revenue. Rather, it could reduce tax revenue by dampening corporate investment. If corporate tax revenue diminished because of a weaker economy, common sense says to help businesses attain better results by lowering tax rates. However, Koo says he would do the opposite. The US and European countries offer tax incentives to foster their strategic industries and attract foreign investments. It is questionable whether revising the tax code to increase tax collection can enhance companies' international competitiveness. In his meeting with Korean business leaders last month, President Lee promised to fully support their business activities. Last week, he had separate dinners with Hyundai Motor Group Executive Chairman Chung Eui-sun and LG Chairman Koo Kwang-mo to discuss trade issues. Lee emphasized cooperation between the government and their businesses. But the bill to amend the Labor Union Act is far from a show of support for companies. Lee's economic policy seems to be deviating from the pragmatism that he vowed to champion. If revising the Labor Union Act is inevitable, lawmakers may as well hold further discussions about whether to make it mandatory for primary contractors to bargain collectively with subcontractor employees.
Mint
18-07-2025
- Business
- Mint
South Korean shares fall on financials, US trade caution
KOSPI falls, foreigners net sellers Korean won strengthens against dollar South Korea benchmark bond yield falls SEOUL, - Round-up of South Korean financial markets: ** South Korean shares dropped on Friday, weighed down by dour performances among financials, as investors remained on the sidelines ahead of fresh signals on U.S. trade discussions. ** The benchmark KOSPI was down 17.96 points, or 0.56%, at 3,174.33, as of 0211 GMT. ** The KOSPI is poised to end the week largely flat, if the current momentum holds. ** "There is resistance around the 3,200 level of the previous high," Kiwoom Securities analysts said in a note. ** U.S. President Donald Trump's latest U.S. tariff threats kept investors on edge, with South Korea facing 25% duties if no deal is reached by August 1. ** Securities firms dropped 3.19% and the financials' sub-index lost 1.76%, retreating after recent gains on optimism over President Lee Jae Myung's market reform agenda. ** Earlier this week, South Korea adopted a revision to its Commercial Act and launched a task force aimed at securing developed market status from a global index provider, in a bid to tackle the undervaluation of local stocks versus global peers. ** Shares of KB Financial Group, Shinhan Financial Group and Woori Financial Group < dropped more than 1% each. ** Among other index heavyweights, chipmaker Samsung Electronics was trading flat, while peer SK Hynix edged 0.19% higher. Shares of battery maker LG Energy Solution climbed 1.26%. ** Hyundai Motor and sister automaker Kia Corp were down 0.71% and 0.3%, respectively. Steelmaker POSCO Holdings added 1.63%, while drugmaker Samsung BioLogics lost 1.68%. ** Of the total 933 traded issues, 202 shares advanced, while 689 declined. ** Foreigners were net sellers of shares worth 41.6 billion won . ** The won was quoted at 1,391.1 per dollar on the onshore settlement platform, 0.08% higher than its previous close at 1,392.2. ** In money and debt markets, September futures on three-year treasury bonds gained 0.04 point to 107.14. ** The most liquid three-year Korean treasury bond yield fell by 0.3 basis point to 2.477%, while the benchmark 10-year yield fell 2.3 basis points to 2.881%. This article was generated from an automated news agency feed without modifications to text.
New Straits Times
15-07-2025
- Business
- New Straits Times
'Arrest, arrest, arrest' won't fix trust deficit, says governance advocate
PUTRAJAYA: Managing public expectations is crucial for leaders and organisations seeking to rebuild trust, especially in today's highly scrutinised environment, says Media Prima Bhd independent non-executive director Datuk Shireen Ann Zahrah Muhiudeen. Speaking at the 2025 International Conference on Governance and Integrity today, Shireen said that while enforcement and reform efforts are necessary, the way those efforts are communicated to the public is just as important. "The first thing that always comes to mind when there's a trust deficit is the need to manage expectations. For example, what you often see in the media is 'arrest, arrest, arrest'. "People on the street think these people are definitely going to jail. "The possible outcomes must be presented and communicated. There are many levels that need to happen before a decision is finalised." "When people are given context and clarity, it aligns with what they expect, and that's how you start building trust," she said during a panel discussion on institutional trust and leadership. The one-day conference was organised by the Prime Minister's Department Legal Affairs Division. Shireen added that a three-pronged approach involving enforcement, preventive management, and community education is essential in tackling integrity issues. "Community education is key — that's how you shift perceptions. But what's also missing is mutual respect. There needs to be respect between the civil service and the political echelons for the system to work." Shireen was referring to Hong Kong's ethical governance model– one that successfully restored public trust. "In Hong Kong, the stock market has recovered significantly thanks to their reforms in ethical governance. "Creating trust in government entities is a long road for any community." She also cited South Korea as a model, noting its aggressive approach in restoring trust and investor confidence, especially in navigating issues related to family-run conglomerates. South Korea recently changed its Commercial Act to improve corporate governance and rebuild public trust. The new law makes company board members more responsible for protecting minority shareholders, not just big family owners. This move, Shireen explained, is meant to fix the problem known as the "Korea discount". "They've been able to deal with their trust deficit. I admire how bold they are in pushing reforms and attracting capital." Also on the panel was Vienna University of Economics Professor of Sustainability and Business Milda Zilinskaite, who said psychology plays a vital role in identifying effective leadership, particularly in times of crisis. "In a crisis, you need leaders who are effective — not just dominant or outspoken. "Introverts often make excellent leaders but are overlooked because they don't 'emerge' in the usual way. "We need to value qualities like active listening, collaborative thinking, and a shared leadership approach, especially in flatter or more hierarchical organisations where speaking up is often discouraged." Petronas Dagangan Bhd Head of Compliance and Planning Strategy Hafiz Bakri also joined the session. The conference brought together policymakers, corporate leaders, and governance experts to explore strategies for strengthening integrity and good governance.
Korea Herald
15-07-2025
- Business
- Korea Herald
Stricter fiduciary duty, tougher rules for martial law gain Cabinet approval
South Korea's Cabinet on Tuesday approved a revision bill of the Commercial Act to require the boardrooms of companies here to fulfill a fiduciary duty not only to the companies, but also to their shareholders, which the liberal government regards as a long-awaited move to tackle the chronic undervaluation on the South Korean market. Before the Cabinet approval, boards of directors had the obligation to act solely in the company's interests, not shareholders. The new bill is to take effect immediately after the promulgation of the law, according to President Lee Jae Myung's office. The revision of the Commercial Act focuses on requiring that one-third of a company's board be made up of outside directors. It also proposes limiting the largest shareholder's voting rights to 3 percent when appointing or dismissing members of the audit committee — whether they are outside directors or not — starting one year after the bill's promulgation. The revision bill also suggests that holding an electronic vote through a virtual shareholders meeting, simultaneously with in-person voting, will become mandatory for all listed companies starting from 2027. It is the first set of laws passed by the parliament through a bipartisan agreement on July 3. The Cabinet also approved a revision bill to impose a new set of restrictions regarding the South Korean president's power to declare martial law, in order to prevent abuse. The bill indicates that the Cabinet is required to create meeting minutes and submit them to the National Assembly if a South Korean president intends to declare martial law and asks for parliamentary approval. Any act of hindering a lawmaker or a civil servant from entering the National Assembly could be subject to an imprisonment of up to five years. No soldiers or police officers are allowed to enter the National Assembly while martial law is in effect, according to the bill, adding that violators face up to three years of imprisonment. A separate revision of the Immigration Act provided legal grounds for hiring temporary foreign workers in specific seasons of high demand for manual labor in the agricultural and marine sectors through a seasonal worker program in South Korea. The bill mandates that the central government, local governments or institutions authorized to do so will only be eligible to recruit foreign workers as seasonal workers, while violators could find themselves behind bars for up to three years. South Korea has been operating a seasonal worker program that began through its first pilot in 2015. This year, the country is expected to hire nearly 100,000 seasonal workers, and the seasonal workers' rights are to be protected under a legal framework six months after the bill is promulgated. During the Cabinet meeting, Lee urged the government to slash the budget in certain areas where public funds are being spent "customarily, inefficiently and wastefully." Lee also thanked medical students for their decision to return to class. "I'm asking the education authorities to swiftly take necessary measures in a follow-up (of their decisions). I'm also asking medical students to contemplate their responsibilities of caring about people's health and lives," said Lee, who presided over the Cabinet meeting at his office in Seoul on Tuesday. "The society we live in lacks dialogue. We cannot lay blame on someone, but from now on, I hope every corner of society can engage more actively in dialogue."
