It's time for a 2:1 interview with the editor. Today, Team Leader Choi Woong-ki is here. Lately, we've had a lot of discussions about topics like market indices and such, as we have quite a lot of inventory. Therefore, today, we will talk about issues that may have a significant impact on the market externally but are crucial to the market. We will discuss the revision of the Commercial Law, which is related to the shareholder restoration policy, as it requires institutional support for valuation discussions. Let's talk about this issue today with Reporter Choi. Hello. Usually, around this time, we start to see changes as we approach June, gearing towards the latter half of the year. Policy discussions might be underway. First, let's talk about what changes are happening this time.

It seems like it's already decided. For example, now, next week, it's already going to be July. So, next week, in the Monday newspapers, policies for the second half of the year will likely change like this. Such reports are expected to be released continuously. Actually, every year, policies for the first and second halves are announced annually. In fact, what comes out next Monday and how July will turn out are quite important. Currently, what's scheduled for July is that the Ministry of Economy and Finance will probably announce a tax law amendment at the end of July. Also, the direction of economic policies for the second half of the year is also scheduled to be announced. Therefore, for those of you who are interested in finance, issues such as the Capital Markets Act, dividend income tax, corporate perspectives, and even inheritance tax, how these will go in the future will be somewhat clear next month. So, let's prepare to broadcast on these topics today.

I've done that, and recently, this week as well as last week, there were many issues and events related to various topics. I will talk about those while organizing them together. Before we delve into the main discussion, there is a topic that reporters are paying attention to, which is related to the National Assembly, specifically the nominee for the Chair of the Legislation and Judiciary Committee. It's quite significant. Who is it? Yes, it's Yoon Han-hong, a member of the ruling party, not the opposition party. So, looking back at last week or this week, there was a parliamentary deadlock due to the allocation of standing committees. However, on Monday of this week, the ruling party decided to take seven seats, including the position of the standing committee chair, moving towards finalizing the composition of the National Assembly. Within these seven seats, the Chair of the Legislation and Judiciary Committee is also included. Yoon Han-hong, a member of the ruling party, is one of the candidates.

There are expectations that the lineup will be announced soon as the key positions are being filled. In fact, now that Representative Yoon has become the chairman of the National Defense Committee, and the National Defense Committee is set to start operating actively in July, it is seen as a very positive signal for investors. Since there are various tasks that the National Defense Committee must handle, such as commercial law issues, capital market law issues, inheritance taxes, etc., it is actually a matter related to national defense. So, some might think that if the chairman is from a conservative standpoint, it might lean more towards corporate interests.

But I'm really curious about the reason why the reporter sees this as a positive thing. For example, last year, during the National Assembly audit, when Representative Yoon Han-yeong took on a new role as the party's floor leader after being re-elected, I started to contact him more frequently to have many conversations about how things were going. Looking at the situation from last year, considering that the National Assembly audit will take place next month and the chairman of the National Defense Commission will play an important role in handling agenda items, a couple of episodes from last year's audit come to mind. In October of last year, the biggest issue during the audit was the short selling issue. Before the audit, the Financial Services Commission announced the illegal short selling by a global hedge fund, and then argued that improvements to the short selling system were necessary.

I did that at that time. Chairman Kim Ju-hyun, on October 11th last year, mentioned the need for institutional improvement during the national audit. On that day, the discussion arose in the ruling and opposition parties about the need for improvement in a sense. A few days later, on October 17th, Representative Yoon Nan, who is in charge of the ruling party, pointed out that the attitude of such public officials should be changed drastically. He mentioned that in the current situation where investment in our country is leaning towards overseas conditions, causing investors to be disadvantaged, it is difficult for them to make profits. He even argued that investors naturally suspect the government and institutions, such as short selling, and express doubts. After suggesting that public officials should change their attitudes, he stated that institutional improvement will be made shortly. Chairman Kim Ju-hyun mentioned this at the national level a while later.

In November, at that time, the short selling ban was finally implemented, so it seems quite biased towards the financial authorities, the government, or one side, but some lawmakers are sensitive to investors' concerns. Another thing is that it is originally the role of the National Assembly. In fact, yes, another thing is that now, in the Changwon Masanhoeon District in Gyeongsangnam-do, until last year, he was a re-elected member, and he was also re-elected in April this year. He won the triple election in a completely conservative stronghold. Last year, during the general election campaign, when he asked various investment-related questions to Yuna, he was campaigning hard there. So when I asked if he was already elected, he said, This can change in a moment because the public sentiment is scary. You really need to know that public sentiment is scary and talk about this.

Investors are currently very interested in various legal issues and value-ups. Therefore, they seem unlikely to ignore the key bills that investors are discussing due to the authority issue seen by the Judicial Affairs Committee. In fact, especially in the case of the Judicial Affairs Committee, the ruling and opposition parties don't have much significance. Because justice, especially the existence of the nation, ultimately leads to policies that can be more helpful to the people and investors when delving deeper. Members of the National Assembly have taken their seats for that reason. In fact, there are some preconceptions and biases, as well as some past experiences, that lead to such situations.

As the Chairman of the National Assembly with various overlapping issues piled up, expectations are high for the role of Member Yun Han. Yes, that's right. Let's delve into specifics. Even if I read recent articles, Chairman Lee Bok-hyun mentioned it once before. It's not about avoiding sensitive topics like this anymore, but directly touching upon them. One of them is the issue of the Commercial Act, right? Yes, that's correct. There are voices calling for revisions in that area. Yes, that's right. In fact, similar discussions were held yesterday at a forum, and even Mr. Baek also mentioned it. Before today's broadcast, I organized how Chairman Lee Bok-hyun talked about the revision of the Commercial Act. Truly, the confrontation between Chairman Lee Bok-hyun and companies was intense over the past month. In fact, on January 2nd this year, President Yoon Seong-yeol emphasized the need for amending the Commercial Act.

I raised the issue, but after that, in the follow-up briefing by the Ministry of Justice, the matter seemed to disappear into thin air, and discussions about the amendment of tax laws or similar topics began to surface. There was a tendency for the issue to fade away as we entered the first quarter, around March or April. However, suddenly, on May 16th, during my visit to New York, Director Lee Hyun asked me a question. He inquired about what the government is preparing for in the long term to achieve value-up. When I asked what they were really preparing for in terms of long-term tax or related matters, it seemed to me that this statement was prepared intentionally. For example, the legal obligation of directors regarding shareholder interests must be introduced without fail. From the perspective of foreign investors, such statements were made. Before the start of the second half of the year, they were discussing setting a direction like this before the opening of the National Assembly.

So, at that time, 14 reporters from the Financial Supervisory Service (FSS) accompanied them. Everyone voluntarily revealed this as news, and as a result, it is being reported continuously even in Korea now. This is the content of the revised Commercial Act that the reporter is talking about. It's not common to the extent of looking at legal provisions like Article 382 on death, so the sensitivity of Article 382 on death has become an issue due to the revision of the Commercial Act. When Director Lee Bok-hyun directly talked about it, reporters didn't even imagine it to that extent. So, it became a big news. That's right, that's why it was reported first overseas, and in Korea, there are 14 media outlets and about 200 reporters at the FSS, and the rest of the reporters.

Now, I've received everything, and it has come to the point where I'm using it. But it didn't end in the Navy like that. After it was reported like that, on June 12th, at this month's National Assembly, what happened was, 153 domestic listed companies conducted a survey, and half of the listed companies were negative about the revision of the Commercial Act, and lawsuits were coming, and various industry associations started to come out against it. Since I don't really like it, it was done on the 12th, but on the 14th, on Friday, Director Lee Bok-hyun usually doesn't hold a briefing on Fridays. But suddenly, the government held an emergency briefing and talked about it again. It means that they are worried about embezzlement when amending the Commercial Act, so they suggested abolishing embezzlement as well. However, eight economic associations said expanding it like this on Monday of this week is not allowed, saying it shouldn't be expanded to shareholders, shareholders' this far.

I brought up the counterargument again yesterday during the debate. Director Lee Bokhyun attended the debate on the revision of the Commercial Law. There was interest in what kind of backlash there would be. Reports came out related to this. The crucial point is that journalists are making great efforts to grasp the tone. Whether the tone rises or falls, that's the key point. How was it yesterday? During the debate, Chairman Lee was giving and receiving comments. Yesterday, in fact, it seemed like an economic organization hosted the debate. Therefore, the host side gave speeches, and after the debate ended in about one or two hours, they briefed the reporters on the related backlash. Even then, the tone seemed to have softened a bit. How did it look at that time?

Overall, we didn't specifically talk about amending the Commercial Act like this, but rather broadly speaking, the current corporate governance structure, which used to be the driving force of the economy in the past industrialization era, is now being criticized as an obstacle to the development and growth of the capital market. Therefore, now is the optimal time to have discussions on these matters. So, we have been emphasizing a bit vaguely on how the government should proceed in this regard. Even in front of the Commercial Act subcommittee, we talked about Article 382 regarding death, but ultimately the key point is whether executives should only consider the company's profits when performing their duties or should they also consider the interests of shareholders. In advanced countries, most consider both, especially in the case of the United States, to an excessive extent.

The policy being pursued is being strongly implemented, and that's why now the stock prices in the U.S. are rising like this. There is a background story to that, which we cannot achieve. However, we are saying that it won't work out like this. If it does, then the thought arises whether the amendment to the Commercial Act will proceed in that direction. Yes, why is that? Because within the government, there is still no consensus on this. Director Lee Bok-hyun mentioned this, saying that even the Ministry of Justice cannot handle this well. So, at the beginning of this year, this happened, and that's why yesterday, in fact, there was a report. Despite that, a question arose, which was that since the Ministry of Justice is blocking the Commercial Act, they say they won't do it, but if they do, from the perspective of the Ministry of Justice, they might not use it. Even so, then Director Lee of the Korea Corporate Governance Service said that the corporate governance structure needs to be improved, so what are some ways to do that.

The Commercial Act is under the jurisdiction of the Ministry of Justice, so leaving the Commercial Act aside, the Capital Market Act falls under the jurisdiction of finance. In fact, when it comes to amendments, it's either the Financial Services Commission or the National Assembly. Well, there's that, but in reality, if there is a lot of discussion between finance and the Ministry of Justice, it can proceed more smoothly. Therefore, by changing the special regulations of the Capital Market Act, we are now introducing this. When it comes to shareholders, it should be seen as a circuit, or a round, yes, like a circuit. Moreover, there have been many discussions not about all listed companies but initially about promoting listed companies. I actually asked this question to Director Lee Bok-hyun yesterday during the briefing. He said that instead of amending the Commercial Act, gradually promoting listed companies through amendments to the Capital Market Act is not predetermined. Furthermore, yesterday, after 8 p.m., the Financial Supervisory Service also provided explanatory materials. So, the Financial Supervisory Service...

We are not considering amending the Capital Market Act related to any fiduciary duties. Looking at the current situation, it seemed like we would go for an amendment to the Capital Market Act, but again, it seems like we might also go for an amendment to the Commercial Act, but that is being blocked by the Ministry of Justice, so at the moment, within the government, it seems like there is a situation where what has been unified is not coming out right now. Actually, as mentioned earlier, the President said so, Prime Minister Han Duck-soo also mentioned it, and Director Geumgang showed a very strong will about a month ago, even going to the U.S. several times to talk about it, etc. Just by looking at that, we can say that the government is very determined, but the Ministry of Justice is against it. If this continues, even the Financial Services Commission, in terms of capital markets, may take a detour.

I feel like it's just lightly colored, and then it just ends like that, isn't it? So, I also wonder if this is really going to be revised significantly. That's now the key point, so I first tried to investigate it. However, based on the current situation, it is a fact that there is no unified opinion on the clear confirmation of the revision. But, from the perspective of intentions, there is a strong stance from the government and the ruling party. That's how I see it. Why is that? Because first of all, why did the President talk about revising the Commercial Act? And why did Director Lee Bok-hyun say that this should definitely be introduced, mentioning New York IR? When you look at that, it seems that both the President and Director Lee Bok-hyun have a strong determination for the revision of the Commercial Act. Later, when I also investigated during the holidays, the Samsung C&T merger case was the biggest issue at that time, and there were various issues such as fraudulent accounting.

There was a lot of controversy at that time. The team leader of the investigation team was President Yoon Seong, and the prosecutor who wrote the indictment at that time was Director Lee Bok-hyun. At that time, when I went to find the indictment, I saw that it was written that it is the duty to thoroughly review the business feasibility of the merger for the protection of shareholders' interests, and Samsung Electronics and Samsung Corporation violated that. President Yoon Seong-yeol and Director Lee Bok-hyun felt very much about investigating such corporate matters during their time as prosecutors, especially regarding the interests of shareholders. They felt a lot about the amendment of the Commercial Act. Thinking about it, what I am also paying attention to is the National Assembly's plenary session on July 23rd. I believe that the results will have an impact on the amendment of the Commercial Act. Former Vice-Chairman Han Dong-hoon and the other two have conducted numerous investigations related to corporate matters, and they really understood why the amendment of the Commercial Act is necessary.

I felt a lot about why shareholder rights protection is needed, and I believe I know that very well. Therefore, depending on how the ruling party decides on July 23, it is natural that the stock market may be affected. If Han Dong-hoon, the former chairman, becomes the head of the subcommittee, then the president, the ruling party leader, and the chairman of the Financial Services Commission are directly connected, so they can have power. There may be political disputes and different opinions, but in terms of investor-related matters, I think there will be a similar consensus. The Democratic Party has included related amendments to the Commercial Act as a major pledge, and now Representative Jeong Jun has already submitted a bill on this matter.

Ultimately, it is a matter of changing the law, and in order to change the law, the current political situation is very strong in terms of resistance. Therefore, especially now, how the Democratic Party's party doctrine is determined is crucial. However, if you look at it from the perspective of the contents that were promised even during the general election, the government is hesitating a bit on the issue of amending the Commercial Act, so it cannot be completely excluded. At this point, there is not much time left, so let me mention just one more thing. Our investors are very interested in the issue of capital gains tax. In fact, the president mentioned that abolishing or not introducing the capital gains tax is as important as amending the Commercial Act strongly for the sake of the 14 million individual investors. How do you think this will proceed now? In fact, yesterday, Minister Han Duck-soo

The Prime Minister mentioned in the briefing that the abolition of private tutoring should be done, and if it is not abolished, it will be difficult for the stock market and other heavenly investments. The government strongly advocates for the abolition, based on the position that President Yoon mentioned in January. Currently, regarding private tutoring, there are the Financial Services Commission, the Financial Supervisory Service, the Ministry of Education, and the Ministry of Economy and Finance. However, in the Ministry of Economy and Finance, former Vice Minister An Do, who is expected to play an active role as a member of the Economic Policy Committee, recently stated in an interview that it should be implemented in January next year. So, Minister Jin Sung-jun and the current standing committee members are also in favor of the implementation. Therefore, once the National Assembly session opens in July, it is expected that the abolition will be publicly announced. It seems necessary to see how public opinion will go in that direction.

So, let's first implement it with the Democratic Party, and then we can improve it later. Yes, that's right. Next, now, whether it's from the ruling party or the government, when various considerations are taken into account, it's better not to introduce it for now. Understood. This will be discussed further after July, and we will continue to talk together with the press. I've heard your points well. Thank you.

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