On June 11, 2020, the Ministry of Justice announced a legislative proposal for a partial amendment to the Korean Commercial Code, and the Korea Fair Trade Commission (the “KFTC”) also announced the proposed legislation for an amendment to the Monopoly Regulation and Fair Trade Law (the “Fair Trade Law”) (together the “Proposed Amendments”).  The Proposed Amendments were approved on August 25, 2020 at the national cabinet meeting of the Republic of Korea along with the proposed enactment of the Act on Supervision of Financial Groups.  With respect to the Korean Commercial Code and the Fair Trade Law, amendments containing similar provisions had been submitted previously to the 20^th National Assembly, but were discarded due to expiration of the National Assembly’s term.  Upon opening of a new National Assembly, the government is now actively pushing to make progress on the Proposed Amendments.

A number of other bills have also been proposed, which are likely to influence the structure and operation of Korean companies.  One of the proposed bills is the Act on Special Cases Concerning Listed Companies (the “Special Act on Listed Companies”) initiated by National Assemblyman Yong-Woo Lee.  As the regulatory environment for corporate governance is expected to further evolve, we advise keeping a close eye on the latest developments in legislation.

In the following attachment, we will discuss the key provisions that may bring about significant changes to corporate governance of Korean companies, and the potential impact of the Proposed Amendments, particularly on the Korean Commercial Code and the Fair Trade Law.
 

1.  Key Changes and Implications of the Proposed Amendment to the Korean Commercial Code

2.  Key Changes and Implications of the Proposed Amendment to the Fair Trade Law, Particularly in Terms of Corporate Governance

3.  Other Bills Proposed to the National Assembly

4.  Government’s Plan to Allow General Holding Companies to Own CVCs