[Exclusive] Ruling party sits in silence during review of mandatory treasury share cancellation...Hypocritical?

[Financial News] The Democratic Party of Korea appears to be pushing hard for the third amendment to the Commercial Act of the Republic of Korea on mandatory cancellation of treasury shares. However, it was confirmed on the 4th that during the actual deliberation by the First Subcommittee on Legislative Review of the Legislation and Judiciary Committee on the 3rd, its members merely filled their seats and did not participate. Observers say this is because, although the government and ruling camp outwardly support the third Commercial Act amendment, there are deep internal divisions within the ruling party.
According to the transcript obtained by Financial News that day, the subcommittee bundled 14 different Commercial Act amendment bills and discussed them for about 31 minutes, but only opposition lawmakers took part in the debate. The six members of the Legislation and Judiciary Committee from the Democratic Party of Korea neither expressed opinions nor asked questions. This stands in stark contrast to the government–party stance that it was determined to pass the third Commercial Act amendment. President Lee Jae-myung had personally pressed for swift action, and as recently as the 2nd, the camp had signaled that it would push the bill through the plenary session of the National Assembly on the 5th. Yet after the subcommittee’s review on the 3rd, they shifted gears, saying they would hold a legislative hearing and aim to pass the bill in early March.
On the surface, they cited criticism from the business community and the opposition as the reason. They said they would take into account proposals to exempt involuntarily acquired treasury shares and companies with foreign ownership caps, such as telecommunications companies and those in the defense industry. In reality, however, analysts say the Democratic Party’s internal disagreements have not been resolved. Some party lawmakers are reportedly arguing that concerns from the business sector should be accommodated, while others insist that venture and start-up companies should be exempt. Differences between the Democratic Party’s Special Committee on the K-Capital Market and members of the Legislation and Judiciary Committee over the detailed design of mandatory treasury share cancellation also appear to be a factor. In fact, within the Democratic Party there are competing drafts, including a bill by Ahn Do-geol that would exempt venture and start-up firms, and another by Lee Jeong-mun that would protect companies with foreign ownership limits, such as telecom operators.
During the subcommittee meeting on the 3rd, it was instead lawmakers from the People Power Party who mainly voiced their views. Representative Kim Jae-seop, who had himself introduced a Commercial Act amendment bill explicitly mandating the cancellation of treasury shares, expressed agreement with the need for mandatory cancellation. Meanwhile, lawmakers such as Cho Bae-sook and Na Kyung-won raised concerns about the policy. Kim’s bill would, in principle, require companies to cancel treasury shares within one year of acquisition, but it would exempt shares acquired for mergers and acquisitions (M&A) or for employee compensation.
haeram@fnnews.com Lee Haeram Reporter