The Supreme Court practically opposes the amendment of the 3% rule “needs revision”

Entry 2020.11.20 07:48 | Revision 2020.11.20 07:50

The Supreme Court practically opposes the 3% rule, which is a key issue among the amendments to the trade law that the government and the ruling party are carrying out. The 3% rule restricts the voting rights of major shareholders to less than 3% when selecting the members of the audit committee at corporate shareholders’ meetings. The business community opposes it due to concerns such as infringement of shareholders’ rights and abuse of foreign speculative capital.

The Chosun Ilbo reported on the 20th that, according to Representative Soo-jin Cho, the court administration delivered a position to the first subcommittee of the Legislative Judicial Committee of the National Assembly, which is in charge of amending the Commercial Law, that ” needs a careful review “regarding the introduction of the 3% rule.

Regarding the 3% rule, the court administration informed the National Assembly that it could be an excessive recognition of the exception of the “principle of equality of equity” and “principle of one week, one vote” against the nature of the rights of shareholders. Regarding the separate election plan of the audit committee, he said: “It is to limit the voting rights of majority shareholders to 3% while forcing the separate appointment of directors who become members of the audit committee. “.

When a publicly traded company appoints the audit committee, the government separates it from other directors, and the largest shareholder has lobbied for amendments to the commercial law to limit voting rights to just 3% of the total number of related parties. , regardless of the stake you have. The business community is concerned that the management rights of major shareholders will be greatly affected. This is because the largest shareholder can only exercise 3% of the voting rights, so the force that has raised even more than the largest shareholder can choose the auditor at will.

The government has called this “a way to prevent the transfer of major shareholders and ensure the independence of the audit committee members,” but the Supreme Court expressed concern that it may infringe on shareholders’ rights. Representative Cho Soo-jin said, “If the court administration, headed by the Chief of the Supreme Court, Kim Myung-soo, appointed by President Moon Jae-in, objects, we should be cautious about the review.”

The Administration of the Court also presented a position that “a careful review is necessary” of some of the amendments to the Commercial Law that also were initiated by the Democrats. Representative Park Joo-min and others came up with a proposal to make it easier to choose a specific person by generating multiple votes for a candidate when choosing multiple directors. However, the court administration said, “There is a positive aspect of improving transparency, but there are few legislative laws like Russia, Mexico and Chile, and European countries and most of the US states have not implemented it.” . Furthermore, regarding the ‘compulsory electronic voting’ system initiated by Rep. Park Yong-jin, he said: “It may lead to irrationality that even small businesses do not require electronic voting.