Vol. 4 Num 327 Fri. April 30, 2004  

Main S Korea party plans laws to boost market

South Korea's new majority party plans economy-boosting laws to introduce class action suits, soften limits on fund investment in stocks and ease rules on liquidating firms, the party leader said yesterday.

Chung Dong-Young, who heads the Uri Party that won a majority in a parliamentary election on April 15, also said there would be a law to enhance accounting transparency at the family-run "chaebol" conglomerates that dominate Asia's fourth-largest economy.

"We will concentrate on the market economy, on trying to make it stronger and also creating a good quality of life for our people," Chung said in his first interview since the poll.

Some foreign investors have expressed concern the party might shift the country to the left and be less market-friendly than the main opposition Grand National Party.

But Chung denied this, saying his party was impatient with the lack of progress in the past year on privatising firms in state hands since the 1997-98 Asian financial crisis.

"There is an understanding within our party which recognises that reforms in the public sector have not gone as far as wanted or as planned," he said. 'This includes the privatisation of public corporations."

He said planned privatisations would go ahead as scheduled.

Parliament convenes in early June. The planned legislation requires a simple majority, meaning there would be little or no impediment to passing the bills. The Uri Party secured 152 of the National Assembly's 299 seats in the election.

"The Uri Party, which has gained the majority in parliament, will exert all its efforts to bring stability. So there is nothing for foreign investors to be concerned about," he said.

Legislation would include bills to allow class action suits -- a way to strengthen the rights of smaller shareholders. Limits on state-run pension funds investing in the stock market would also be eased, he said.

Accounting practices at chaebol would also be made more transparent, in line with foreign investor concerns about sharp book-keeping practices.

Asked about foreign investor concerns about the left-wing Democratic Labour Party, which won 10 seats at the election, Chung said its presence would help stabilise labour relations.