Korean business leaders urge a halt to commercial law amendment

Executives from 16 major South Korean corporations, including Samsung, SK, Hyundai Motor, and LG, issued an unprecedented joint statement on Thursday, warning of the national economy's “severe challenges.” The group called for a halt to discussions on proposed amendments to commercial law and urged lawmakers to focus on overcoming the economic crisis.

The collective action, coordinated by the Federation of Korean Industries (FKI) and other business associations, comes amid heightened uncertainty stemming from the potential re-election of former U.S. President Donald Trump. The last instance was during the domestic economic slump caused by the Middle East Respiratory Syndrome (MERS) outbreak in July 2015.

At a meeting held at the Lotte Hotel in central Seoul on Thursday, the executives specifically voiced opposition to a commercial law amendment proposed by the Democratic Party of Korea. The legislation seeks to expand directors' fiduciary duties to shareholders. “If the amendment passes, it will lead to excessive litigation and open the door for attacks by foreign speculative capital, making normal board operations difficult and hindering the discovery of new growth engines,” the statement read.

The executives highlighted their concerns over South Korea's slowing economic momentum. “Achieving even a 2% growth rate has become a challenge. Many investors now prefer U.S. markets over domestic ones due to waning corporate growth potential, and that corporate debt has surged significantly due to a prolonged economic downturn,” they said. “Structural stagnation in domestic consumption is inevitable due to high household debt. With the global environment deteriorating, even the resilience of exports - once a pillar of the economy - can no longer be guaranteed.” The group urged the government to act swiftly. “Amid global protectionist trends, countries are waging an all-out battle to support advanced industries. We cannot afford to miss the golden time. Immediate support is critical,” they said.


전남혁 기자 forward@donga.com