Stock-Related Law Takes Effect in July

The government will wrap up a class action law related to stocks at the extra session of the National Assembly in April and put it into effect as early as July or August.

The bill is highly likely to be passed in the Assembly since the opposition party that had previously been opposed to the legislation changed direction to conditional assent. The government is planning to accept the modification request by the opposition.

“The government will have the class action bill passed at the extra session of the National Assembly in April and we will discuss the bill at a policy meeting among the ruling and opposition parties held on March 13,” said Vice Premier and Finance and Economy Minister Kim Jin Pyo today.

Grand National Party (GNP) chief policymaker Rep. Yim Tae Hee said at a telephone interview with our newspaper, “We will agree to pass the bill if the government modifies it to prevent people from abusing the law.” He added, “It has yet to be officially decided at the party level, but we reached an understanding in the policy committee after in-depth review.” He went further, “If we allow corporations to claim damages from false incriminations and strengthen requirements for lawsuits, there will be no need to limit the subject of the law to corporations with assets of more than 2 trillion won.”

In response to these requests, Minister Kim said, “There is no reason that the government would not accept this proposal. We will reflect them in the bill to much extent as possible after practical review.”

As to the chairman system of banks which sparked controversy over control of banks, he said, “The system cannot meet global standards and cannot be helpful to prudential governance. The government strongly recommends that banks abolish the system.”

The Ministry of Finance and Economy is planning to unveil its mid- and long-term improvement plan for the stock market around March 10. Economic Policy Bureau Manager of the MOFE, Byun Yang Ho said though that the Ministry is not considering preparing a short-term stimulus package.

Kwang-Hyun Kim Kwang-Am Cheon kkh@donga.com iam@donga.com