Nat’l Assembly Passes Revision to Commercial Act Amid Opposition Filibuster

Seoul: The National Assembly on Monday passed another revision to the Commercial Act aimed at better protecting minority shareholders after the main opposition People Power Party's (PPP) filibuster came to an end. The revision, pushed by the ruling Democratic Party, passed with 180 votes in favor and two abstentions by lawmakers of the minor New Reform Party during a plenary session boycotted by the PPP.According to Yonhap News Agency, the latest revision mandates the adoption of a cumulative voting system at large listed companies with assets over 2 trillion won (US$1.45 billion) and expands the separate nomination of audit committee members from one to at least two. Such provisions were excluded from an earlier revision to the Commercial Act passed by the National Assembly last month with bipartisan support.The PPP launched the 24-hour filibuster Sunday morning in opposition to the latest revision, voicing concerns over inefficient corporate governance and a negative impact on the competitiveness of com panies. Cumulative voting allows shareholders to cast multiple votes proportionate to their shareholding when electing board members, helping to better protect the interests of small shareholders.The revision comes as President Lee Jae Myung has pledged to improve corporate governance as part of efforts to eliminate the so-called Korea Discount, which refers to undervalued local stocks. In early July, the Assembly passed a revision to the Commercial Act that would expand the fiduciary duty of corporate board members to all shareholders.The latest move also comes after the DP-dominated National Assembly passed a series of contentious bills this month, including broadcasting bills that revamp the governance of public broadcasters and the so-called "yellow envelope bill," designed to guarantee the bargaining rights of indirectly employed subcontracted workers.