SEOUL -- South Korea's National Assembly passed a bill to limit power of South Korea's strong family-run conglomerates, or chaebol -- a cornerstone policy of President Moon Jae-in.
The legislation to revise the Commercial Law was passed on Wednesday. Two other bills related to the chaebol -- a revision of the Antitrust & Fair Trade Law and enactment of the Financial Conglomerates Supervision Law -- are expected to be passed later in the evening.
Moon's ruling Democratic Party holds 174 out of 300 at the assembly seats, followed by the opposition People Power Party with 84. The bills require a simple majority vote to be passed.
The revision to the Commercial Law means that a shareholder's voting right will be limited to 3%, irrespective of the size of the person's stake, when a listed company appoints or dismisses a director in the boardroom's audit committee. That means a chaebol family cannot easily appoint or dismiss a board director in the committee.
"We aim to stop a major shareholder's abuse of power and protect minor shareholders' rights by appointing members of the audit committee separately," said Rep. Yun Ho-jung, head of the assembly's legislation and judiciary committee.
Moon took office in 2017 with promises of reining in all-powerful conglomerates like Samsung and Hyundai Motor, which serve as pillars of the South Korean economy, though he has so far struggled to deliver on those promises.
The other two bills are aimed to keeping a chaebol's power in check by making conglomerates report to antitrust authorities when they buy startups, as well as strengthening capital requirements for financial firms under chaebol.
But a chaebol lobbyist group and opposition lawmakers argue that the bills will pave the way for foreign activist funds to intervene in the management of South Korean conglomerates.
"I don't understand why [the DP] hurries to pass the bills while ignoring the opinion of corporations," Park Yong-maan, chairman of the Korea Chamber of Commerce and Industry, told reporters on Tuesday. "People who pass them should be accountable for possible side effects and unexpected problems, although I do not want to see them."
On top of the chaebol bills, the DP is clashing with the PPP over the establishment of an institution that can investigate high-ranking government officials.
The DP is trying to deprive the opposition party of a veto right to appoint the head of the institution by revising a related law, but the PPP strongly opposes this and has vowed to mobilize all measures to block this, including the use of filibuster.
A bill to ban sending leaflets to North Korea is also pending at the Assembly as the DP seeks to stop such activities. But the PPP says that it is nothing but to please North Korean dictator Kim Jong Un.
Separately, Moon on Monday apologized for a feud between his justice minister and prosecutor general, while vowing to press ahead with reform of the prosecutor's office. Last month, Justice Minister Choo Mi-ae demanded the resignation of Prosecutor-General Yoon Seok-youl, accusing him of abuse of power.