Federation of Korean Industries Vice Chairman Kim Chang-beom, front, speaks to protest a controversial revision to the Commercial Act which the business sector claims will undermine corporate growth momentum, at a hotel in Seoul, Thursday. He is joined by executives of 16 conglomerates. Yonhap

Top executives of Korea's major conglomerates issued an urgent joint statement, Thursday, protesting a controversial revision plan to the Commercial Act, arguing that the amendment, intended to be more favorable to shareholders, will undermine corporate growth momentum.

Such a statement, involving major companies and a business lobby group, is extremely rare. The most recent one was issued in July 2015, when the nation faced multiple challenges, including the MERS epidemic.

The revision to the Commercial Act, led by the main opposition Democratic Party of Korea (DPK), is aimed at holding board of directors more responsible for protecting the rights of shareholders. Under the current act, they are obliged to perform their duties only for their companies, but the envisaged version expands this obligation to include shareholders.

Companies are concerned that the revision will lead to frequent lawsuits by speculative funds and shareholders based overseas, according to the Federation of Korean Industries (FKI) and the business executives.

"The revision will make it more difficult for any corporate board of directors to carry out their duties effectively, while also preventing companies from identifying their next growth engines," FKI Vice Chairman Kim Chang-beom said during a press conference after issuing the joint statement with 16 top executives of major companies.

The major business executives included Samsung Electronics President Park Seung-hee and SK Supex Council President Lee Hyung-hee. Top executives of Hyundai Motor, LG, Lotte and Hanwha also took part in the event.

"The revision is also feared to weaken the overall competitiveness of most Korean companies and undermine the value of the nation's stock market," Kim said.

The FKI and business leaders, for their part, vowed to improve communication with shareholders in order to make the Korean stock market more attractive. The senior executives of major companies also pledged to provide technological support to small- and medium-sized enterprises, aiming to boost the nation's export competitiveness and stimulate domestic demand.

The remarks came amid growing economic uncertainties in the country. Korea's GDP growth for 2023 was only 1.4 percent and the forecast for this year is expected to remain in the low 2-percent range, according to data from the Bank of Korea.

This has also slowed down corporate growth momentum in Korea, prompting more investors to favor the U.S. stock market over Korea's, according to the business leaders. To make matters worse, corporate debt is rising rapidly and the won-dollar exchange rate remains high, hovering at around 1,400 won per dollar.

The business leaders also called on the government to implement "drastic deregulation" to revitalize the economy.

"The government should carry out bold regulatory reforms to rev up the economy, and spare no efforts to support key cutting-edge tech areas, such as artificial intelligence, semiconductors, secondary batteries and mobility," they said in the joint statement.

They also pledged to play a pivotal part in boosting economic growth and enhancing the nation's export competitiveness.

"We will focus on creating more jobs and finding new revenue areas without being swayed by any internal or external risk factors, and reignite the growth engine of the Korean economy by pioneering new markets and achieving more technological innovation," they said.

Executives of other major conglomerates, such as HD Hyundai, GS, CJ and Doosan, also took part in the statement.