Korean business lobby groups are calling on the government to stop discussions on revisions to the commercial law, which they say will create chaos in the corporate sector. Instead, they are urging the government to focus on amending the Financial Investment Services and Capital Markets Act to better protect minority shareholders.
In a statement released on Thursday, eight major business groups, including the Korea Enterprises Federation, said that the proposed revisions to the commercial law would have a "significant negative impact" on the Korean economy and businesses. They argued that the revisions would lead to an increase in lawsuits against directors, threaten companies' management rights, and discourage investment and mergers and acquisitions.
The business groups also said that the revisions would come at a time when Korean companies are already facing a number of challenges, including the global economic slowdown, rising protectionism, and weak domestic demand. They argued that the revisions would only add to these challenges and make it more difficult for Korean companies to compete in the global market.
Instead of revising the commercial law, the business groups are urging the government to focus on amending the Financial Investment Services and Capital Markets Act. They said that this would be a more effective way to protect minority shareholders without harming businesses.
The business groups' call comes as the government is considering revisions to the commercial law that would strengthen the rights of minority shareholders. The government has said that it wants to make it easier for minority shareholders to sue directors and to elect their own representatives to the board of directors.
However, the business groups argue that these revisions would have unintended consequences, such as making it more difficult for companies to raise capital and make investments. They also argue that the revisions would make it easier for activist investors to take control of Korean companies.
The debate over the commercial law is likely to continue for some time. However, the business groups' call for a halt to the discussions is a sign that they are increasingly concerned about the potential impact of the revisions on the Korean economy.
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