On the 21st, at the Lotte Hotel in Jung-gu, Seoul, Kim Chang-beom, Vice Chairman of the FKI, delivered an urgent statement, joined by major corporate executives, to revive the Korean economy. (Lee Chung-woo)

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The Federation of Korean Industries (FKI), a major business lobby group in South Korea, has joined forces with business leaders to issue a joint statement opposing revisions to the Commercial Act.

In a statement on Thursday, the FKI said the proposed amendment, which requires firms to extend directors‘ fiduciary duties to shareholders’ interests, is considered a significant threat to the business environment

The leaders from 16 major conglomerates voiced opposition to the proposal from the Democratic Party of Korea.

They argued that the proposed bill would expose boards to endless lawsuits and aggressive maneuvers by foreign takeover investors.

In the joint statement, the corporate leaders emphasized the continued difficulties could push the domestic economy into a deep quagmire.

The business community also argued that incorporating shareholders into directors‘ fiduciary responsibilities could hamper board decision-making.

Heightened legal risks, including potential charges of breach of trust, may stifle investment and innovation while deterring qualified outside directors, they said.