[SEOUL] The head of South Korea’s financial watchdog said on Wednesday he had offered to resign, a day after the acting president vetoed a revised Commercial Act that would have broadened the duty of corporate board members to act in the interests of all shareholders.
Financial Supervisory Service (FSS) Governor Lee Bok Hyun had said the bill, which was passed by the opposition-dominated parliament, should not be vetoed as it would help resolve the so-called “Korea discount” in the long run.
The term refers to depressed stock prices attributed to poor corporate governance at South Korea’s family-owned conglomerates.
The revision to the Commercial Act that was vetoed expanded the fiduciary duty of board members to protect the interests of minority shareholders. The current law requires directors to work in the company’s best interests.
Lee said on a local radio programme that he had expressed his intention to step down to the chairman of the Financial Services Commission (FSC). The offer was not immediately accepted, he added.
The commission is the agency that formulates financial policies and it has been leading the country’s corporate reform push aimed at resolving the “Korea discount”. The FSS is a subordinate agency.
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Lee has been a member of the country’s top four financial authorities, known as F4, who regularly meet for market stabilising efforts during times of heightened volatility, such as a briefly imposed martial law last December.
Lee, a former prosecutor specialised in financial crimes, was appointed to the role usually held by finance figures, by now-impeached President Yoon Suk Yeol, also a former prosecutor, in 2022. His three-year term ends in June.
“I am confident he would not have vetoed the bill if he were there, as it was his policy to protect shareholder value and improve capital markets,” Lee said, referring to Yoon.
Since taking office in 2022, Lee has actively launched investigations into a number of controversial share issue plans and held a series of discussion forums to address various issues related to stock market reforms. REUTERS
