South Korea assembly passes commerce bill expanding duty of boards to shareholders

SEOUL, July 3 (Reuters) - South Korea's parliament passed on Thursday a revision to the Commercial Act to expand the fiduciary duty of board members to protect the interests of minority shareholders, in a move aimed at boosting the country's corporate market valuations.

President Lee Jae Myung, who was elected last month, had pledged support for the legislation to help eliminate the so-called "Korea Discount" that has been a drag on the valuation of South Korean companies.

The discount refers to the lower valuations that South Korean companies typically trade on relative to their global peers, partly due to the dominance of family-owned conglomerates, which have been criticised for putting their interests ahead of other shareholders.

A previous version of the bill approved by parliament had been vetoed by the conservative government of Lee's predecessor, but the latest version was a compromise backed by the conservative main opposition party.