"Naver Received Favoritism Related to Dunamu Merger in Amendment of Law"...People Power Party Launches Offensive During National Assembly Audit

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The People Power Party has launched an offensive, alleging that favoritism was given to Naver in the amendment process of the Enforcement Decree of the Specific Financial Information Act (SFIA), which contains the eligibility criteria for major shareholders of virtual asset businesses, in relation to the merger with Dunamu. They claim that after Naver requested the financial authorities to exclude punishment records under the dual punishment provision from disqualifying major shareholders, the Regulatory Rationalization Committee recommended improvements with the same intent.

On the 13th, Rep. Park Dae-chul of the People Power Party focused his questioning on the amendment process of the SFIA Enforcement Decree during the National Assembly's National Policy Committee audit, targeting Lim Gi-geun, the head of the Office for Government Policy Coordination.

Rep. Park pointed out that although the National Assembly amended the SFIA to include legal violation records of major shareholders of virtual asset businesses as disqualifying factors, exceptions were added in the amendment process to recognize cases of punishment under the dual punishment provision or minor violations.

Previously, when this exception was included, there were suspicions in the National Assembly that it was a regulation for Naver, which had been fined 200 million KRW for violating the Fair Trade Act in the first trial related to real estate listing information abuse. Naver is pursuing a comprehensive stock exchange between its subsidiary Naver Financial and Dunamu.

Rep. Park directly mentioned the corporate merger between Naver and Dunamu, raising its relevance to the amendment of the Enforcement Decree. Specifically, he stated, "Naver and Dunamu are pursuing a comprehensive merger, and according to this law, the eligibility criteria for major shareholders have changed, making the merger impossible." He further claimed, "However, during the process of amending the Enforcement Decree, the Regulatory Rationalization Committee intervened and changed the Enforcement Decree again."

According to materials submitted by the Financial Services Commission to Rep. Park's office, the Financial Intelligence Unit (FIU) met with representatives from Naver and Naver Financial on March 20, May 28, and June 2 of this year. The Financial Services Commission stated in this material, "We received a request from Naver to exclude punishment records under the dual punishment provision from disqualifying factors."

Rep. Park argued that despite the Financial Services Commission repeatedly stating that there was insufficient legal basis for including exception provisions in the Enforcement Decree during the discussions of the Regulatory Rationalization Committee, the committee recommended the establishment of exception provisions.

In fact, in the minutes of the Regulatory Rationalization Committee's Growth Subcommittee meeting on July 24, the Financial Services Commission stated that while the Capital Markets Act and the Online Investment-Linked Financial Business Act have exceptions in the Enforcement Decree based on legal delegation, "it is difficult to see that the SFIA clearly grants discretion to include exceptions in the Enforcement Decree." Subsequently, the Regulatory Rationalization Committee ultimately recommended improvements to establish exception clauses in accordance with relevant provisions of the Capital Markets Act, stating that there is a need to recognize exceptions when determining criminal punishment records for legal violations.

Rep. Park also raised issues regarding the lack of a re-notification of the Enforcement Decree and the disqualification and avoidance issues of committee members. He argued, "There was no report to the Prime Minister, and there was no report to the President. If there was a report, it would be perjury, and if there was no report, it means that such an important matter was passed over."

He then demanded the submission of materials that could confirm whether discussions were held with the Ministry of Legislation regarding the omission of the re-notification. Previously, the Financial Services Commission responded to Rep. Park's office, stating, "The regulatory content has been relaxed, and since there is little need to gather opinions again reflecting the opinions of stakeholders, we judged that re-notification was unnecessary."

Rep. Shin Dong-wook of the People Power Party continued to raise the same issue. He claimed that although the Financial Services Commission opposed the introduction of exception provisions multiple times in April and June, the Office for Government Policy Coordination requested additional opinions, and ultimately, on July 24, the Regulatory Rationalization Committee recommended the establishment of exception provisions.

Rep. Shin stated, "Naver does not qualify to acquire Dunamu, but Naver's legal representatives requested the Office for Government Policy Coordination to apply the exception provisions, and despite the Financial Services Commission's continuous opposition, the Office for Government Policy Coordination kept requesting opinions from the Financial Services Commission."

Director Lim denied allegations of favoritism or external pressure. He stated, "I can confidently say that the process was conducted without any shame in terms of procedural progress and substantive review." He explained that the decision-making of the Regulatory Rationalization Committee does not involve the President or the Prime Minister. He also added that while it is true that Financial Services Commission officials initially expressed opposition, they received a judgment from the Ministry of Legislation that it was possible to include exception provisions in the Enforcement Decree.

Director Lim emphasized that "the Financial Services Commission can express its opinions in the process of the Office for Government Policy Coordination collecting the overall agenda," and noted that the Financial Services Commission did not request a re-examination after the decision of the Regulatory Rationalization Committee.

The Financial Services Commission also stated in the materials submitted to Rep. Park's office that this regulation was not amended with a specific company in mind, and similar opinions were expressed by the Korea Economic Association, Korea Internet Companies Association, Korea Fintech Industry Association, Startup Alliance, and Digital Asset Exchange Alliance (DAXA).

The Office for Government Policy Coordination issued a press release on the same day, stating that there was no consideration of a specific company in the regulatory review process of the SFIA Enforcement Decree, nor was there any involvement of Prime Minister Han Seung-soo, and that the review was conducted according to normal procedures since before the Prime Minister's inauguration. It also stated that the decision on whether to re-notify the legislation is a matter for the Financial Services Commission to determine, and since the Financial Services Commission judged that re-notification was unnecessary and went through the review of the Ministry of Legislation, there are no procedural defects.

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