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An increasing number of publicly traded companies are citing “economic democratization”, the core economic policy of the Moon Jae-in administration, as a risk factor for corporate governance. It is an analysis that is unusual to note that the government’s economic policy is a key risk to corporate investment in the securities report to which investors refer.
As a result of the analysis of the electronic disclosure of the Financial Supervision Service by the Korea Economic Daily on the 22nd, 20 publicly traded companies, including CJ, Lotte Holdings, Dong-A Socio Holdings and Daelim Industrial, raised economic democratization as a key investment risk. in the stock report after the Moon Jae-in administration launch.
A publicly traded company stated in a stock exchange report: “There is a possibility that various measures to achieve economic democratization, such as strengthening the transparency of corporate governance structures, strengthening the requirements for holding companies, strengthening regulations to boost labor and strengthening supervision is likely to legislate the separation. “Since then, it may be necessary to comply with more stringent regulations regarding the maintenance of the equity ratio and debt ratio of companies. subsidiaries, and this may increase the financial burden. ”
Economic democratization is a concept that was also emphasized in the last government. Former President Park Geun-hye was elected with a commitment to democratize the economy. However, Shinsegae Food was the only company that raised economic democratization as an investment risk factor in the Park Geun-hye administration.
At the time, the Park Geun-hye management selected the bakery industry as a suitable business for small and medium-sized businesses and created restrictions on the entry of large corporate franchises into the alley business district. Shinsegae Food, which operates confectionery brands such as Day & Day, said: “The bakery industry is badly affected by economic democratization.”
It’s an analysis that the number of publicly traded companies that raised economic democratization as a key investment risk increased as the Moon Jae-in administration began to democratize the economy in earnest. The government and the ruling party have launched several laws extending economic democratization to the concept of “just economy.” Representative of the amendments to the Commercial Law and Fair Trade Law approved by the National Assembly last year.
In particular, since the Fair Trade Law was completely revised last year, regulations on holding companies were tightened. As a result, economic analysts say there is a growing trend to point to economic democratization as a key investment risk factor, focusing on publicly traded holding companies.
Another publicly traded company stated in the securities report: “Under the amended Fair Trade Act, companies belonging to the holding company and the business group that are restricted to mutual investment are likely to be affected in big measure”. Be careful when investing that you may impose a fee. ”
An official of an economic organization said: “It is rare that the economic policy of the government has risen to the central investment risk of the companies.” “The profit-sharing system promoted by the government and the ruling party in recent years is also part of the Economic Democratization Policy, and the business environment will become more difficult. It is coming out,” he criticized.
Reporter Mi-Hyun Cho [email protected]
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