Re-examining Shrinking Voting Rights of Financial Units of Conglomerates

The government and the majority Uri Party have decided to re-examine the revision law on fair trade which has sought to reduce the voting rights of financial units of conglomerates, whose assets exceed two trillion won, from the current 30 percent to 15 percent.

In addition, both sides agreed to introduce a supplementary budget for the revitalization of the current stagnate economic situation and to decide by early June on how much it would be and when it will be injected.

In order to tackle the nose-diving stock market, they also agreed to prioritize the following bills when the 17th National Assembly opens: revision bill on fund management law, which allows pension to be invested in stock market, revision bill on indirect investment asset management law, which aims to create more private equity funds loaded in stock market, and a bill on retirement grant security law, which seeks the introduction of new pension system.

Chun Jung-bae, the floor leader of the Uri Party, and Hong Jae-hyung, the Uri Party’s chief policymaker, had dinner together with Finance Minister Lee Hun-jai yesterday at the VIP restaurant of the National Assembly where they had a meeting to cover such issues.

Hong said at a briefing after that, “The bill which had been initiated by the Korea Fair Trade Commission was actually introduced into the National Assembly without serious negotiations within the government. When dealing with important policy initiatives like this, it is indispensable to have thorough discussion within the government as well as clear communication between the parties and the government.”

He also said, “From now on, the parties’ role should be expanded beyond a passive supporter of government policy to an active participant in policy-making process,” and, he repeatedly stressed, “We need to have discussion again on the revision bill on fair trade.”

Accordingly, among issues included in the revision bill, it is highly likely to re-examine an attempt to shrink voting rights of financial affiliates of conglomerates, which have been blocked by the Ministry of Finance and Economy

Relating to this, sources from the Uri Party said, “Either extending the one-year grace period of this bill or altering percentage of financial units’ voting rights will be considered for readjustment.”

Hong, regarding the supplementary budget, said, “Now, small and middle sized company, and merchants with few assets are suffering seriously, so that, as soon as the National Assembly opens, we will discuss introduction of the supplementary budget for it, and by early June, we will determine how much it will be and when it will be injected. By August, the budget will be implemented after the bill is passed.”

At this meeting, the majority Uri Party members called for the government to establish a contingency plan and contended, “The government is lacking understanding of reality. People in the countryside are crying out for a low sale of distilled liquor, as we speak. The government is just projecting a positive outlook based merely on index.”

Young-Hae Choi Chi-Young Shin yhchoi65@donga.com higgledy@donga.com