Applying the Brakes on the Amnesty of Corporations’ Past Acts of Accounting Embellishment

The Uri Party policy-making committee decided to give a grace period of three years to business’ past acts of accounting embellishment starting next year to exclude them from becoming targets of a securities collective lawsuit.

However, the standing committee under the National Assembly Legislation and Judiciary Committee has protested against such a revision movement from the lawmakers of Uri Party and the Democratic Labor Party, stirring up much criticism.

The Uri Party’s third policy coordinating committee executive secretary Kim Jong-ryul stated on Sunday, “The committee decided that giving a grace period to the corporation to clean up their past acts of accounting embellishment is the appropriate thing to do. After a survey of the actual situation, we have come to the conclusion that a scheme is necessary to exclude the corporation for three years from being collectively sued for past accounting embellishment acts staring next year.”

Legislation and Judiciary Committee executive secretary lawmaker Choi Jae-cheon of the Uri Party said, “It was the overall opinion of the lawmakers belonging to the Legislation and Judiciary Committee that it is not appropriate to revise the law prior to it being executed.”

Meanwhile, a high-ranking government official expressed concern, saying, “It is likely to be executed according to the original bill of securities collective lawsuit. So far, we have been looking into the ways to give them opportunities to annul past acts of accounting embellishment, but it seems that it will come to nothing.”

The government has been considering to revise the supplementary provision to exclude the corporations accounting embellishment acts prior to law promulgation date (January 20, 2004) or enforcement date (January 1, 2005) for three years from becoming targets of lawsuit.

Young-Hae Choi Suk-Ho Shin yhchoi65@donga.com kyle@donga.com