[Editorial] Finance Industry Bill Change Has So Substance

After well over a year, a bill to reform the "Financial Industry Structure Improvement Act" (Geumsanbeop) was passed yesterday by a subcommittee of the National Assembly's Finance and Economy Committee. Samsung Life will have its voting rights on its shares of Samsung Electronics it held since before the "five percent rule" of 1997 subject to restrictions, and stake Samsung Card has in Samsung Everland that exceed 5 percent and was acquired after that rule kicked in will be immediately subject to voting rights restrictions and be required to be sold within five years. You are looking at a compromise between those who wanted to be faithful to principles and require the sale of everything that is in violation to the law and those who opposed making that compulsory.

Compromises may be good at resolving political conflict, but they also mean that there has been a retreat from principles and that is the case with this particular legislation. Looking at the effects it is supposed to have it becomes only natural that it be criticized for letting Samsung off the hook. Voting rights in Samsung Life's stake was were going to be limited anyway two years from now, because of the Fair Trade Law. In addition, Samsung chairman Lee Kun Hee's son Lee Jae Yong and other family members own over 50 percent of Everland, so they can exercise control over it even without the voting rights that currently come with the shares held by Samsung Card. In the end the only real measures being taken are forcing the sale of Samsung Card's sares, and there's a five-year grace period on that