Shareholding Restrictions Unconstitutional and Should be Repealed

On February 18, Mr. Lee Seok-yeon, a lawyer said, “I have finished the necessary research for a constitutional petition against the unconstitutional system of restricting the ceiling on total shareholdings, and when related companies intend to file a petition, I will take the case.”

Mr. Lee took on an important role in deriving the unconstitutionality decision on the Special Law on New Administrative Capital last year, and he said so in his lecture titled “The Principles of a Market Economy as Defined in the Constitution, and the Direction of Constitutional Economic and Social Policies” given at the monthly breakfast meeting of CEOs hosted by the International Business Center under the Federation of Korean Industries.

He said, “Chairman Kang Chul-kyu of the Fair Trade Commission (FTC) tries to focus on the second clause of Article 119 of the constitution that partially allows government intervention into public economy to highlight the reasonableness of restriction on shareholdings, but that is only a supplemental, provisory article to the constitution,” and argues, “Such restriction that goes against Article 126 (of which sets the limits of interventions by government authorities) should be nullified.”

The attorney also said, “I have concluded the review of legal logics regarding the unconstitutionality of the shareholding restriction, and I will represent the companies qualified to file a claim if needed,” and added, “I will scrutinize laws and systems that hinder business activities hereon and will fix those with constitutional problems.”

Moreover, he pointed out that “the plans for a central administrative city the government formed through partisan consultation also goes directly against the constitution and the decision made by the constitutional court.”

Related to this issue, an insider of the business sector said, “It is true that a number of large corporations have considerable issues with the restriction on the shareholdings of other companies, but it is unclear whether any one will file a constitutional petition knowing full well of having to confront the government head on.”

Joong-Hyun Park sanjuck@donga.com