trực tiếp bóng đá k+Supreme Court Decision 2011Da57869 Decided September 12, 2013 about Damages
Supreme Court Decision 2011Da57869 Decided September 12, 2013 about Damages
Main Issues and Holdings
[1] Relevant point in time to satisfy trực tiếp bóng đá k+ share-holding requirement under trực tiếp bóng đá k+ Commercial Act (“CA”) or trực tiếp bóng đá k+ former Securities and Exchange Act when filing a representative lawsuit pursuant to Article 403 of trực tiếp bóng đá k+ CA and trực tiếp bóng đá k+ legality of that portion of a representative lawsuit which was instituted by those shareholders who subsequently lose their shareholder status due to stock disposal (negative in principle)
[2] Whether transactions between a director of a parent company and its subsidiary are of trực tiếp bóng đá k+ kind that must obtain approval of trực tiếp bóng đá k+ parent company’s board of directors subject to Article 398 of trực tiếp bóng đá k+ former CA (negative)
[3] Whether a company’s director who becomes a majority shareholder of a competitor company and participates at its decision-making and business execution must obtain approval by trực tiếp bóng đá k+ board of directors of trực tiếp bóng đá k+ company where s/he belongs under Article 397(1) of trực tiếp bóng đá k+ CA (affirmative), and whether a director who becomes a majority shareholder of another company which substantively operates as his/her company’s branch or operation division pursuing common interests must obtain approval by trực tiếp bóng đá k+ board of directors of trực tiếp bóng đá k+ company where s/he belongs under trực tiếp bóng đá k+ same provision (negative)
[4] If trực tiếp bóng đá k+ board of directors, through a legitimate procedure and in trực tiếp bóng đá k+ interest of trực tiếp bóng đá k+ company, gives up on a business opportunity that could be profitable to trực tiếp bóng đá k+ company or approves one of trực tiếp bóng đá k+ directors to use such opportunities, whether that director or trực tiếp bóng đá k+ directors who participate in trực tiếp bóng đá k+ board’s decision to approve thereby breach(es) a good manager’s duty of care or duty of loyalty (negative in principle)
Summary of Decision
[1] In light of both Article 403(1) through (5) of trực tiếp bóng đá k+ Commercial Act (“CA”) and Article 191-13(1) of trực tiếp bóng đá k+ former Securities and Exchange Act (repealed by Addendum Article 2 of Act No. 8635 of trực tiếp bóng đá k+ Financial Investment Services and Capital Markets Act of Aug. 3, 2007, “trực tiếp bóng đá k+ former SEA”) considered together, in order for several shareholders to file a representative suit, either when requesting trực tiếp bóng đá k+ company to file a suit to seek director’s liability or when filing that suit for trực tiếp bóng đá k+ company, they must satisfy trực tiếp bóng đá k+ stock holding reqirement under trực tiếp bóng đá k+ CA and trực tiếp bóng đá k+ former SEA. After trực tiếp bóng đá k+ suit is filed, trực tiếp bóng đá k+ shareholders need not keep trực tiếp bóng đá k+ required number of stocks. However, if some of trực tiếp bóng đá k+ shareholders who file a representative suit subsequently lose their shareholder status due to having no stock as a result of stock disposal , then, barring special circumstances, they lose standing as Plaintiff and that portion of trực tiếp bóng đá k+ suit initiated by him/herwould become unlawful regardless of whether other Plaintiffs who initiated trực tiếp bóng đá k+ suit maintain their shareholder status.
[2] Article 398 of trực tiếp bóng đá k+ former Commercial Act (amended by Act No. 10600 of April 14, 2011, “trực tiếp bóng đá k+ former CA”), which requires a company’s director to obtain approval from trực tiếp bóng đá k+ board of directors in regards to transactions with trực tiếp bóng đá k+ company, is intended to prevent trực tiếp bóng đá k+ director from promoting his/her own interest and causing loss to trực tiếp bóng đá k+ company or its shareholders by means of direct transactions with trực tiếp bóng đá k+ company using his/her status or transactions between trực tiếp bóng đá k+ company and a third party for his/her own benefit. For this provision to apply, trực tiếp bóng đá k+ company with whom trực tiếp bóng đá k+ director or a third party transacts should be trực tiếp bóng đá k+ company to which trực tiếp bóng đá k+ director in question owes a good manager’s duty of care or duty of loyalty. In case of a transaction between a parent company’s director and its subsidiary, even if trực tiếp bóng đá k+ subsidiary’s entire stocks are owned by trực tiếp bóng đá k+ parent company, since a parent company and its subsidiary have separate legal personalities under trực tiếp bóng đá k+ CA and any possible loss resulting from trực tiếp bóng đá k+ transaction is only to trực tiếp bóng đá k+ subsidiary company with trực tiếp bóng đá k+ parent company merely affected indirectly, such a transaction with trực tiếp bóng đá k+ subsidiary company cannot be treated identically as one with trực tiếp bóng đá k+ parent company. Thus, trực tiếp bóng đá k+ transaction between trực tiếp bóng đá k+ parent company’s director and its subsidiary does not constitute a transaction falling under Article 398 of trực tiếp bóng đá k+ former CA in terms of trực tiếp bóng đá k+ relationship with trực tiếp bóng đá k+ parent company, and parent company’s director need not obtain approval from trực tiếp bóng đá k+ parent company’s board of directors with regards to that transaction.
[3] trực tiếp bóng đá k+ purpose of Article 397(1) of trực tiếp bóng đá k+ Commercial Act which provides that “no director shall, without trực tiếp bóng đá k+ approval of trực tiếp bóng đá k+ board of directors, engage in for his/her own account or for trực tiếp bóng đá k+ account of a third party any transaction in trực tiếp bóng đá k+ same line of business of trực tiếp bóng đá k+ company or become an unlimited liability member or a director of any other company with trực tiếp bóng đá k+ same business purpose.” is to prohibit a director from engaging in competitive business likely to injure trực tiếp bóng đá k+ company’s interest through pursuing his/her own interest while using his/her status, thereby ensuring effective and proper running of trực tiếp bóng đá k+ company with a good manager’s duty of care and faithfully fulfilling his/her duties. Thus it is trực tiếp bóng đá k+ case that a director should obtain approval of trực tiếp bóng đá k+ board of directors where s/he belongs not only when s/he becomes a director or representative director of a competitor company but also when s/he becomes a controlling shareholder and participates in its decision-making and business execution. Whereas a company, if it operates in trực tiếp bóng đá k+ same business category as trực tiếp bóng đá k+ director’s company, does not fail to be a competitor company merely because they operate in different business locations at trực tiếp bóng đá k+ time in question, it cannot be seen that there is room for conflict of interests between trực tiếp bóng đá k+ two companies if trực tiếp bóng đá k+ company that is considered being in potential competition operates substantively as a branch or business division of trực tiếp bóng đá k+ director’s company and is in a common interest-seeking relationship, which is to be determined in light of trực tiếp bóng đá k+ whole transaction conditions such as trực tiếp bóng đá k+ two companies’ shareholding situation and corporate governance, business operation pattern, use of same or similar trade name or trademark, market’s perceived competition between trực tiếp bóng đá k+ two and trực tiếp bóng đá k+ like. For a director who wants to acquire stocks and become a controlling shareholder of another company like trực tiếp bóng đá k+ above, it is hard to see that approval of trực tiếp bóng đá k+ board of directors as prescribed in Article 397 of trực tiếp bóng đá k+ CA is necessary.
[4] Directors, as they have a good manager’s duty of care for their company, are deemed to have fulfilled their duty as directors only when trực tiếp bóng đá k+ duty of care was faithfully exercised pursuant to law and trực tiếp bóng đá k+ articles of incorporation. When there is a potentially profitable business opportunity, a director must offer this information to trực tiếp bóng đá k+ company so that it may use trực tiếp bóng đá k+ opportunity, and must not use it for their or a third party’s gain without trực tiếp bóng đá k+ corporation’s approval. However, if trực tiếp bóng đá k+ board of directors decided to abandon trực tiếp bóng đá k+ opportunity or approved a certain director to use trực tiếp bóng đá k+ opportunity after collecting and analyzing sufficient information and making decisions in trực tiếp bóng đá k+ interest of trực tiếp bóng đá k+ company through legitimate procedure, trực tiếp bóng đá k+ directors’ business judgment to so decide should be respected, unless trực tiếp bóng đá k+ decision making process was markedly irrational, and in such a case, even if a director came to use trực tiếp bóng đá k+ business opportunity, it cannot be said that trực tiếp bóng đá k+ director or trực tiếp bóng đá k+ directors who participated in trực tiếp bóng đá k+ decision breached trực tiếp bóng đá k+ duty of care of a good manager or trực tiếp bóng đá k+ duty of loyalty.
Reference Provisions
[1] Articles 403(1) through (5) of trực tiếp bóng đá k+ Commercial Act, Article 191-13(1) of trực tiếp bóng đá k+ former Securities and Exchange Act (repealed by Addendum Article 2 of Act No. 8635 of trực tiếp bóng đá k+ Financial Investment Services and Capital Markets Act of Aug. 3, 2007) /
[2] Article 398 of trực tiếp bóng đá k+ former Commercial Act (amended by Act No. 10600 of April 14, 2011) /
[3] Article 397 of trực tiếp bóng đá k+ Commercial Act /
[4] Articles 382(2) and 382-3 of trực tiếp bóng đá k+ Commercial Act, Article 681 of trực tiếp bóng đá k+ Civil Act Article 403 of trực tiếp bóng đá k+ Commercial Act (Representative Suits by Shareholders)
(1) Any shareholder who holds no less than one percent of trực tiếp bóng đá k+ total issued and outstanding shares may request that trực tiếp bóng đá k+ company file an action against directors to compel them to perform their obligations.
(2) A request under paragraph (1) shall be made in writing, stating trực tiếp bóng đá k+ grounds therefor.
(3) If a company fails to file an action within 30 days from trực tiếp bóng đá k+ date of receiving trực tiếp bóng đá k+ request under paragraph (2), trực tiếp bóng đá k+ shareholder mentioned in paragraph (1) may immediately file such action on behalf of trực tiếp bóng đá k+ company.
(5) trực tiếp bóng đá k+ effect of filing an action shall not be prejudiced even where trực tiếp bóng đá k+ number of shares held by a shareholder who files an action under paragraphs (3) and (4) falls below one percent of trực tiếp bóng đá k+ total issued and outstanding shares after trực tiếp bóng đá k+ institution of trực tiếp bóng đá k+ action (excluding where trực tiếp bóng đá k+ shareholder no longer holds trực tiếp bóng đá k+ issued and outstanding shares).
1. A director or a major shareholder under Article 542-8 (2) 6;
2. trực tiếp bóng đá k+ spouse and lineal ascendents or descendents of a person falling under subparagraph 1;
3. Lineal ascendents or descendents of trực tiếp bóng đá k+ spouse of a person falling under subparagraph 1;
4. A company in which a half or more of trực tiếp bóng đá k+ total number of issued and outstanding shares with voting rights is held by a person falling under any of subparagraphs 1 through 3, solely or jointly with others, or its subsidiary company;
5. A company in which a half or more of trực tiếp bóng đá k+ total number of issued and outstanding shares with voting rights is held by a person falling under any of subparagraphs 1 through 3, together with a company falling under subparagraph 4.
Article 397 of trực tiếp bóng đá k+ Commercial Act (Prohibition against Competition)
(1) No director shall, without trực tiếp bóng đá k+ approval of trực tiếp bóng đá k+ board of directors, engage in for his/her own account or for trực tiếp bóng đá k+ account of a third party any transaction in trực tiếp bóng đá k+ same line of business of trực tiếp bóng đá k+ company or become an unlimited liability member or a director of any other company, trực tiếp bóng đá k+ business purposes of which are trực tiếp bóng đá k+ same as those of trực tiếp bóng đá k+ company.
(2) If any director has engaged in a transaction for his/her own account in contravention of paragraph (1), trực tiếp bóng đá k+ company may, by a resolution of trực tiếp bóng đá k+ board of directors, deem such transaction as made for trực tiếp bóng đá k+ account of trực tiếp bóng đá k+ company and if he/she has made a transaction for trực tiếp bóng đá k+ account of a third party, trực tiếp bóng đá k+ company may request trực tiếp bóng đá k+ pertinent director to transfer any interest accrued therefrom.
(3) Rights under paragraph (2) shall be extinct upon trực tiếp bóng đá k+ lapse of one year after trực tiếp bóng đá k+ date such transaction has been made.
Article 382 of trực tiếp bóng đá k+ Commercial Act (Appointment of Directors, Relationship with Company and Outside Directors) (2) trực tiếp bóng đá k+ provisions of trực tiếp bóng đá k+ Civil Act regarding delegation shall apply mutatis mutandis to trực tiếp bóng đá k+ relationship between trực tiếp bóng đá k+ company and trực tiếp bóng đá k+ directors.
Article 382-3 of trực tiếp bóng đá k+ Commercial Act (Duty of Loyalty by Directors) Directors shall perform their duties in good faith for trực tiếp bóng đá k+ interest of trực tiếp bóng đá k+ company in accordance with Acts, subordinate statutes, and trực tiếp bóng đá k+ articles of incorporation.
Article 681 of trực tiếp bóng đá k+ Civil Act (Mandatary’s Duty of Care and Due Diligence) A mandatary shall manage trực tiếp bóng đá k+ affairs entrusted to him with trực tiếp bóng đá k+ care of a good manager in accordance with trực tiếp bóng đá k+ tenor of trực tiếp bóng đá k+ mandate.
Reference Cases[2] Supreme Court Decision 2007Da71271 decided March 11, 2010 (Gong2010Sang, 709) / [3] Supreme Court Decision 92Da53583 decided April 9, 1993 (Gong1993Sang, 1365)
Plaintiff-Appellant Solidarity for Economic Reform, et al. (Attorney Kim Seok-yeon, Counsel for plaintiff-appellant)
Defendant-Appellee Defendant 1, et al. (Yulchon LLC, Attorneys Shin Seong-taek, et al., Counsel for defendant-appellee)
Judgment of trực tiếp bóng đá k+ court below Seoul High Court Decision 2010Na70751 decided June 16, 2011
Disposition All of trực tiếp bóng đá k+ appeals are dismissed. trực tiếp bóng đá k+ costs of appeal are assessed against Plaintiffs.
Reasoning trực tiếp bóng đá k+ grounds of appeal are examined.
1. Regarding ground of appeal No. 1
Under Article 403(1) of trực tiếp bóng đá k+ Commercial Act (“trực tiếp bóng đá k+ CA”), any shareholder who holds no less than one percent of trực tiếp bóng đá k+ total issued and outstanding shares (“issued shares”) may request that trực tiếp bóng đá k+ company file an action against directors to compel them to perform their obligations. Under Article 403(2), a request under parag. (1) shall be made in writing, stating trực tiếp bóng đá k+ grounds. Under Article 403(3), if a company fails to file an action within 30 days from trực tiếp bóng đá k+ date of receiving trực tiếp bóng đá k+ request under parag. (2), trực tiếp bóng đá k+ shareholder mentioned in parag. (1) may immediately file such action on behalf of trực tiếp bóng đá k+ company. Under Article 403(5), trực tiếp bóng đá k+ effect of filing an action shall not be prejudiced even where trực tiếp bóng đá k+ number of shares held by a shareholder who files an action under parag. (3) and (4) falls below one percent of trực tiếp bóng đá k+ total issued shares after trực tiếp bóng đá k+ institution of trực tiếp bóng đá k+ action, excluding where trực tiếp bóng đá k+ shareholder no longer holds trực tiếp bóng đá k+ issued shares. And Article 191-13(1) of trực tiếp bóng đá k+ former Securities and Exchange Act (repealed by Addendum Article 2 of Act No. 8635 of trực tiếp bóng đá k+ Financial Investment Services and Capital Markets Act of Aug. 3, 2007, “trực tiếp bóng đá k+ former SEA”) provides that “a person who has held no less than 1/10.000 of entire issued shares of trực tiếp bóng đá k+ listed corporations or Kosdaq-listed corporations under trực tiếp bóng đá k+ Presidential Decree since 6 months ago may exercise shareholders’ rights under Article 403 of trực tiếp bóng đá k+ Commercial Act.”
In light of these provisions considered together, in order for several shareholders to file a representative suit, either when requesting trực tiếp bóng đá k+ company to file a suit to seek director’s liability or when filing that suit for trực tiếp bóng đá k+ company, they must satisfy trực tiếp bóng đá k+ stock holding reqirement under trực tiếp bóng đá k+ CA and trực tiếp bóng đá k+ former SEA. After trực tiếp bóng đá k+ suit is filed, trực tiếp bóng đá k+ shareholders need not keep trực tiếp bóng đá k+ required number of stocks. However, if some of trực tiếp bóng đá k+ shareholders who file a representative suit subsequently lose their shareholder status due to having no stock as a result of stock disposal, then, barring special circumstances, they lose standing as Plaintiff and that portion of trực tiếp bóng đá k+ suit initiated by him/her would become unlawful regardless of whether other Plaintiffs who initiated trực tiếp bóng đá k+ suit maintain their shareholder status. According to trực tiếp bóng đá k+ judgment below, Plaintiffs 2, 7, Tiger Asia Ltd., and Tiger Asia Fund LLC. owned stocks issued by Shinsegae Corporation (“Shinsegae”) at trực tiếp bóng đá k+ time of filing of this case’s litigation. However, they disposed trực tiếp bóng đá k+ stocks before trực tiếp bóng đá k+ closing of oral argument, and did not own any Shinsegae stocks at trực tiếp bóng đá k+ time of closing of trực tiếp bóng đá k+ oral argument. Review of trực tiếp bóng đá k+ above facts in light of trực tiếp bóng đá k+ above principle revealed that trực tiếp bóng đá k+ above Plaintiffs lost standing as this case’s Plaintiff since they came to own none of Shinsegae’s issued shares after trực tiếp bóng đá k+ filing of a representative lawsuit.
trực tiếp bóng đá k+ court below was correct in holding that trực tiếp bóng đá k+ portions of this suit raised by trực tiếp bóng đá k+ above Plaintiffs were all unlawful, and it did not err in misapprehension of legal principle as to elements of shareholder’s representative lawsuit as asserted in trực tiếp bóng đá k+ ground of appeal.
2. Regarding trực tiếp bóng đá k+ ground of appeal No. 2
Article 398 of trực tiếp bóng đá k+ former Commercial Act (amended by Act No. 10600 of April 14, 2011, “trực tiếp bóng đá k+ former CA”), which requires a company’s director to obtain approval from trực tiếp bóng đá k+ board of directors in regards to transactions with trực tiếp bóng đá k+ company, is intended to prevent trực tiếp bóng đá k+ director from promoting his/her own interest and causing loss to trực tiếp bóng đá k+ company or its shareholders by means of direct transactions with trực tiếp bóng đá k+ company using his/her status or transactions between trực tiếp bóng đá k+ company and a third party for his/her own benefit. For this provision to apply, trực tiếp bóng đá k+ company with whom trực tiếp bóng đá k+ director or a third party transacts should be trực tiếp bóng đá k+ company to which trực tiếp bóng đá k+ director in question owes a good manager’s duty of care or duty of loyalty. In case of a transaction between a parent company’s director and its subsidiary, even if trực tiếp bóng đá k+ subsidiary’s entire stocks are owned by trực tiếp bóng đá k+ parent company, since a parent company and its subsidiary have separate legal personalities under trực tiếp bóng đá k+ CA and any possible loss resulting from trực tiếp bóng đá k+ transaction is only to trực tiếp bóng đá k+ subsidiary company with trực tiếp bóng đá k+ parent company merely affected indirectly, such a transaction with trực tiếp bóng đá k+ subsidiary company cannot be treated identically as one with trực tiếp bóng đá k+ parent company. Thus, trực tiếp bóng đá k+ transaction between trực tiếp bóng đá k+ parent company’s director and its subsidiary does not constitute a transaction falling under Article 398 of trực tiếp bóng đá k+ former CA in terms of trực tiếp bóng đá k+ relationship with trực tiếp bóng đá k+ parent company, and parent company’s director need not obtain approval from trực tiếp bóng đá k+ parent company’s board of directors with regards to that transaction.
trực tiếp bóng đá k+ court below, after finding that Defendant 1 was a member of Shinsegae’s board of directors at trực tiếp bóng đá k+ time of subscribing to new stocks at issue here, that G-Shinsegae Department Store Incorp. (“G-Shinsegae”) and Shinsegae are two independent and separate legal entities, and that trực tiếp bóng đá k+ subscription of new stocks at issue here was made between Defendant 1 and G-Shinsegae after trực tiếp bóng đá k+ Shinsegae board of directors’ resolution of non-subscription, ruled that it is difficult to view trực tiếp bóng đá k+ subscription to new stocks at issue here as constituting trực tiếp bóng đá k+ director’s self-dealing in relation to Shinsegae and that this would not differ merely because Shinsegae was G-Shinsegae’s parent company owning trực tiếp bóng đá k+ latter’s entire stocks.
In light of trực tiếp bóng đá k+ legal principle considered above, trực tiếp bóng đá k+ foregoing judgment of trực tiếp bóng đá k+ court below is acceptable as just and did not err in misapprehendinglegal principle as to what constitutes a director’s self-dealing as otherwise asserted in trực tiếp bóng đá k+ ground of appeal.
3. Regarding ground of appeal No. 3
A. trực tiếp bóng đá k+ purpose of Article 397(1) of trực tiếp bóng đá k+ Commercial Act which provides that “no director shall, without trực tiếp bóng đá k+ approval of trực tiếp bóng đá k+ board of directors, engage in for his/her own account or for trực tiếp bóng đá k+ account of a third party any transaction in trực tiếp bóng đá k+ same line of business of trực tiếp bóng đá k+ company or become an unlimited liability member or a director of any other company with trực tiếp bóng đá k+ same business purpose.” is to prohibit a director from engaging in competitive business likely to injure trực tiếp bóng đá k+ company’s interest through pursuing his/her own interest while using his/her status, thereby ensuring effective and proper running of trực tiếp bóng đá k+ company with a good manager’s duty of care and faithfully fulfilling his/her duties. Thus it is trực tiếp bóng đá k+ case that a director should obtain approval of trực tiếp bóng đá k+ board of directors where s/he belongs not only when s/he becomes a director or representative director of a competitor company but also when s/he becomes a controlling shareholder and participates in its decision-making and business execution. Whereas a company, if it operates in trực tiếp bóng đá k+ same business category as trực tiếp bóng đá k+ director’s company, does not fail to be a competitor company merely because they operate in different business locations at trực tiếp bóng đá k+ time in question, it cannot be seen that there is room for conflict of interests between trực tiếp bóng đá k+ two companies if trực tiếp bóng đá k+ company that is considered being in potential competition operates substantively as a branch or business division of trực tiếp bóng đá k+ director’s company and is in a common interest-seeking relationship, which is to be determined in light of trực tiếp bóng đá k+ whole transaction conditions such as trực tiếp bóng đá k+ two companies’ shareholding situation and corporate governance, business operation pattern, use of same or similar trade name or trademark, market’s perceived competition between trực tiếp bóng đá k+ two and trực tiếp bóng đá k+ like. For a director who wants to acquire stocks and become a controlling shareholder of another company like trực tiếp bóng đá k+ above, it is hard to see that approval of trực tiếp bóng đá k+ board of directors as prescribed in Article 397 of trực tiếp bóng đá k+ CA is necessary.
B. According to trực tiếp bóng đá k+ reasoning of trực tiếp bóng đá k+ judgment below and records, trực tiếp bóng đá k+ following circumstances are confirmed.
(1) G-Shinsegae is a subsidiary company established by Shinsegae in order to operate department stores, etc. in Gwangju Metropolitan City withall of its stocks owned by Shinsegae and from around 1995 operated department stores etc. using trực tiếp bóng đá k+ Shinsegae trademark. From trực tiếp bóng đá k+ time of G-Shinsegae’s establishment, Shinsegae effectively operated G-Shinsegae as Shinsegae’s branch store located in Gwangju Metro. City, purchasing goods for it through contracts and controlling its overall management, and this was trực tiếp bóng đá k+ perception of others as well.
(2) When following trực tiếp bóng đá k+ late-1997 foreign exchange crisis G-Shinsegae suffered difficulties in financing and management due to increased financial charges, and to resolve this problem, G-Shinsegae executed trực tiếp bóng đá k+ paid-in capital increase at issue here in consultation with Shinsegae. However, Shinsegae itself was not in a position to participate in recapitalization due to restructuring and other needs, so Defendant 1 came to acquire 83.3% of G-Shinsegae stocks on Feb. 23, 1998 through trực tiếp bóng đá k+ new stock purchase in this case.
(3) Defendant 1 as trực tiếp bóng đá k+ son of Nonparty, trực tiếp bóng đá k+ controlling shareholder of Shinsegae, was a person in special relation to Shinsegae, so he had no reason to manage G-Shinsegae separately from Shinsegae or to compete with Shinsegae. And indeed G-Shinsegae remained in trực tiếp bóng đá k+ same corporate group as Shinsegae despite trực tiếp bóng đá k+ fact that Shinsegae lost its controlling shareholder status and became a second largest shareholder following trực tiếp bóng đá k+ purchase of new stocks in this case.
(4) Even after Defendant 1’s purchase of new stocks, G-Shinsegae continued to use trademarks identical to Shinsegae’s, commissioned Shinsegae with purchase of goods for sale, followed Shinsegae’s management advice and continued to cooperate with Shinsegae as before. Shinsegae also annually received fixed management fees from G-Shinsegae as payment for trademark use and management advice as it did before trực tiếp bóng đá k+ purchase of new stocks in this case.
C. Upon examining these circumstances in light of trực tiếp bóng đá k+ legal principles considered earlier, it was trực tiếp bóng đá k+ case that G-Shinsegae continued to be operated as a Shinsegae branch even after Defendant 1’s purchase of trực tiếp bóng đá k+ new stocks here, and trực tiếp bóng đá k+ records did not show that Defendant 1 made transactions through G-Shinsegae which conflicted with Shinsegae’s interest, so it is difficult to view that Defendant 1 should have obtained under Article 397 of trực tiếp bóng đá k+ CA trực tiếp bóng đá k+ approval of trực tiếp bóng đá k+ Shinsegae board of directors in relation to his becoming trực tiếp bóng đá k+ controlling shareholder following trực tiếp bóng đá k+ purchase of new stocks.
While some of trực tiếp bóng đá k+ judgment of trực tiếp bóng đá k+ court below in its statement of reasoning was improper, trực tiếp bóng đá k+ courts rejection of trực tiếp bóng đá k+ relevant portion of Plaintiffs’ assertion was just in trực tiếp bóng đá k+ end, as there were no errors to affect trực tiếp bóng đá k+ judgment either by misapprehending trực tiếp bóng đá k+ legal principles on trực tiếp bóng đá k+ existence of a competing business relationship or by misconceiving facts, as otherwise alleged in trực tiếp bóng đá k+ grounds of appeal.
4. Regarding ground of appeal No. 4
Directors, as they have a good manager’s duty of care for their company, are deemed to have fulfilled their duty as directors only when trực tiếp bóng đá k+ duty of care was faithfully exercised pursuant to law and trực tiếp bóng đá k+ articles of incorporation. When there is a potentially profitable business opportunity, a director must offer this information to trực tiếp bóng đá k+ company so that it may use trực tiếp bóng đá k+ opportunity, and must not use it for their or a third party’s gain without trực tiếp bóng đá k+ corporation’s approval. However, if trực tiếp bóng đá k+ board of directors decided to abandon trực tiếp bóng đá k+ opportunity or approved a certain director to use trực tiếp bóng đá k+ opportunity after collecting and analyzing sufficient information and making decisions in trực tiếp bóng đá k+ interest of trực tiếp bóng đá k+ company through legitimate procedure, trực tiếp bóng đá k+ directors’business judgment to so decide should be respected, unless trực tiếp bóng đá k+ decision making process was markedly irrational, and in such a case, even if a director came to use trực tiếp bóng đá k+ business opportunity, it cannot be said that trực tiếp bóng đá k+ director or trực tiếp bóng đá k+ directors who participated in trực tiếp bóng đá k+ decision breached trực tiếp bóng đá k+ duty of care of a good manager or trực tiếp bóng đá k+ duty of loyalty. As we review trực tiếp bóng đá k+ reasoning of trực tiếp bóng đá k+ court below in light of trực tiếp bóng đá k+ above legal principles, while its determination that it is not likely Defendant 1 used Shinsegae’s business opportunity is improper in its statement of reasoning, it is ultimately just and acceptable, and there were no errors to affect trực tiếp bóng đá k+ judgment either by misapprehending trực tiếp bóng đá k+ legal principles on elements or procedure where a director may acquire trực tiếp bóng đá k+ corporation’s business opportunity or by misperceiving facts, as otherwise asserted in trực tiếp bóng đá k+ grounds of appeal.
5. Regarding ground of appeal No. 5
Based on trực tiếp bóng đá k+ circumstances stated in its ruling, trực tiếp bóng đá k+ court below determined that there is insufficient reason to conclude that this case’s new stocks were issued at a noticeably low price and that even if this case’s new stocks were issued at a relatively low price, it is not sufficient to acknowledge that Defendants’ decision not to take over trực tiếp bóng đá k+ new stocks was considerably irrational and negligent of their duties as directors.
Upon examining trực tiếp bóng đá k+ reasoning of trực tiếp bóng đá k+ judgment below in light of trực tiếp bóng đá k+ records, trực tiếp bóng đá k+ above determination of trực tiếp bóng đá k+ court below is just and acceptable. Additionally, trực tiếp bóng đá k+ determination can also be seen as including in effect rejection of Plaintiffs’ allegation that since trực tiếp bóng đá k+ new stocks of this case were issued at a noticeably low price without considering trực tiếp bóng đá k+ fact that trực tiếp bóng đá k+ quantity of new stocks was huge enough to result in a transfer of trực tiếp bóng đá k+ right to control, Defendants are obliged as Shinsegae directors to prevent G-Shinsegae from assigning trực tiếp bóng đá k+ new stocks to third parties at trực tiếp bóng đá k+ same price, even if Shinsegae lost right to subscription. Thus, trực tiếp bóng đá k+ judgment below did not err by omitting judgment as otherwise asserted in trực tiếp bóng đá k+ grounds of appeal.
6. Conclusion
Therefore, all of trực tiếp bóng đá k+ appeals are dismissed. trực tiếp bóng đá k+ costs of appeal are assessed against trực tiếp bóng đá k+ losing party. It is so decided as per Disposition by all participating Justices’ assent.
Justices Kim So-young (Presiding Justice)
Shin Young-chul
Lee Sang-hoon (Justice in charge)
Kim Yong-deok
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