I found a very informative article for foreigners interested in Korean project financing market. Korean project financing deal is largely dominated by real estate development financing deal. The author addressed current situation and problem of Korean Savings banks regarding withering Korean project financing market. I have seen many bank clients considering extension of their project financing or ABCP terms due to the withering project-financing market and (more…)
Today it was reported that Kookmin Bank would buy a majority stake of Bank Center Credit, the sixth-largest Kazakhstan commercial bank, worth $634 million. The deal is the largest overseas M&A by a Korean financial institution.
Kookmin bank is targeting to become a leading bank not only in Kazakhstan but also in Central Asia, which (more…)
According to article 5 of the Private International Act(“PIA”) of Korea, a court shall investigate and apply the contents of the foreign law designated by the PIA on its own initiative. However, sometimes it’s not easy for Korean court to confirm the right meaning and contents of foreign laws.
In this regard, the Supreme Court of South Korea has ruled as follows, in a case where the both parties had different interpretation of relevant Polish laws in deciding who’s the real owner of a ship registered in Poland(2006da5130):
“In confirming the content and interpreting the meaning of foreign laws and regulations to be applied to legal relations having foreign elements, the interpretation and application shall be made in accordance with the meaning and the content through which the foreign law is actually interpreted in the home country, and the judgment by the highest court of the home country, unless under special circumstances, shall be respected, but if it is impossible to confirm the content because of the insufficiency in submitted data in the process of a suit about (more…)
A Korean cosmetics Company filed a lawsuit against its model, Ivy, a K-pop female singer, alleging her lies and scandal-plagued private life has damaged its brand images.
The cosmetics company had hired Ivy as its advertisement model last April, but after then, Ivy got a scandal with her ex-boyfriend who allegedly had attempted to blackmail her with a revealing video clip showing him with the K-pop star. Ivy has stopped her career until now and the cosmetics company claims it constitutes a breach of contract under which Ivy is required not to harm the image of the company or its brand with any scandalous or improper behavior. You can read the news article here.
There was a similar case between a top T.V star Choi, Jin-Sil, and its advertiser. The company claimed that (more…)
Yesterday, I read an interesting article which addressed various legal disputes between English instructors(Hagwon teacher) and their Korean employers. I’ve heard of many U.S. or Canadian English teachers who were in that kind of legal disputes. I know it can not be generalized but this article gives useful information on (more…)
The Supreme Court of Korea ruled on February 28 in favor of LG Household and Health Care of Korea(“LG Household”), a domestic diaper manufacturer, saying it did not violate a patent of the U.S. firm Kimberly-Clark Corp.
The Supreme Court held that the disposable diaper with a leak-preventing flap produced by LG Household did not infringe on a patent owned by Kimberly-Clark and its local affiliate Yuhan Kimberly.
It was a long 8-year fierce lawsuit between two giants. Kimberly-Clark (more…)
It was reported yesterday that The Fair Trade Commission of South Korea(FTC) has opened a new division to investigate and monitor international cartels. The new division will be responsible for monitoring foreign companies for possible fair trade law violations as well as those carried out by foreign business associations. There have been increasing number of cross-border cartels suspected of violation on fair trade laws. However,until now, the FTC has been unable to crack down international cartel cases (more…)
This is an ICN(International Competition Network) Anti-Cartel Enforcement Template published on 2007. 5. 9. This template introduces very useful information regarding Korean legislation and related topics on cartels such as:
Information on the Law Relating to Cartels
Scope and Nature of Prohibition on Cartels
Handling Complaints and Initiation of Proceedings
Investigative Powers of the Enforcing Institutions
Procedural Rights of (more…)
In January 31, the Seoul Central District Court ordered the Samsung Group to repay more than 2.33 trillion won ($2.46 billion) to the 14 creditors of its defunct Samsung Motors, which was the country’s biggest-ever financial civil lawsuit. Samsung Group said yesterday that it will appeal that court ruling.
Samsung Motors applied for a court-administered debt restructuring program in June 1999, and Chairman Lee Kun Hee announced his plan to inject private money. Two months later, Samsung signed a deal with the creditors to cover a 2.45 trillion won debt by the end of 2000. Under the agreement, Lee handed over his 3.5 million shares of the unlisted Samsung Life Insurance Co. to the creditors and promised to list the company. However the insurance firm never went public, and creditors were unable to convert all their share to cash due to the large volume. Creditors filed a lawsuit in December 2005, claiming 5 trillion won including penalties.
One of the biggest issues on this trial was the validity of the agreement between Samsung Group and the creditors. Samsung Group alleged that the agreement is void because it was entered under duress. However the court rejected it.
As I’m a lawyer, it was very interesting who would represent Samsung Group and the creditors. There (more…)
Early in this year, Korean Film Council(KOFIC) published “Who’s Who in Korean Film Industry-Producers and Investors“. The name says it all. It deals with key producers and investors in Korean film industry with interviews and profiles. It also includes an article titled “Investment System in Korean Film Industry” which I think very interesting to read, (more…)
For foreign companies in Korea, it is very important to know about Korean labor law. In this regard, Korean Ministry of Labor issued Employer’s Checklist on Working Conditions in Last December. This list is for any company having 5 or more employees and dealing with 7 labor-related laws. I think (more…)
This morning one news article got my eyes on. The news reported that Hana Bank, one of the largest bank in Korea, is expected to be forced to pay up to 1.7 trillion won ($1.8 billion) in penalty taxes for unfair corporate income tax evasion in the course of a merger with the Seoul Bank back in 2002.
According to the news, the Ministry of Finance and Economy has ruled that the merger between Hana Bank and Seoul Bank involved illegal tax evasion. The MFE regarded the merging of two Banks as a “reversed merger”, which means a company in the red, Seoul Bank, pretends to be purchasing Hana Bank, which was in the black, when in fact it was other way round. By doing so, Hana Bank, the actual acquirer, could save corporate income taxes.
Korea’s financial authority approved the merger between Hana and then-struggling Seoul in 2002. Hana Bank is objecting to MFE’s decision. Hana bank said it completed the deal based on the government’s guidelines Hana Bank also commented (more…)
On February 15, the Fair Trade Commission approved a merger of the country’s top cell phone provider with the No. 2 broadband Internet provider, with a few conditions. You can read (more…)
According to the Korean Commercial Act, a transaction between a director and a company shall acquire an approval by the board of directors(Article 398 of the Commercial Act). This is for the purpose of preventing the director from using his status in engaging in a transaction of the company leading to promoting his or a third party’s interest and causing damages to the company and its shareholders.
Here comes the question: if the general meeting of shareholders adopts a resolution ratifying an interest-conflicting transaction which had not yet been approved by the board of directors, the transaction can be validated ex post facto?
The Supreme Court denied it in its Decision 2005Da4284 Delivered on May 10, 2007.
In this case, Mr. Choi Soon Young, who at that time served as the representative director of Daehan Life Insurance Co., Ltd(the plaintiff) and the president of the Shindonga Educational Institute(the defendant), had donated about 18,000,000 USD to the defendant on behalf of the plaintiff company.
The Supreme Court held that “unless there are special circumstances where there should be the consent of all shareholders or that the approval is stipulated in the articles of incorporation as the right of the shareholders’ meeting, the approval of an interest-conflicting transaction between a director and the company shall be deemed to be subject to an arbitrary decision by the board of directors, so if an interest-conflicting (more…)
The Monopoly Regulation and Fair Trade Act of Korea(herein after the “Act”) prohibits certain types of act as a market dominating enterpriser’s act of abusing its status(for example, a transaction refusal act). However the Act requires the existence of “unfairness” in market dominating enterpriser’s act. So there has been a dispute with regard to how to determine the existence of “unfairness”.
This case is the first Supreme Court’s decision on that key issue in anti-trust law where POSCO refused to supply hot rolled steel coils to a local company. The Supreme Court held that “unfairness should be acknowledged only where a transaction refusal act can be deemed as perpetrated with intent or objective of maintaining or reinforcing monopolistic status at the market, i.e., influencing a market order artificially by restricting a free competition at the market, and with the evaluation that the refusal act is likely to have anti-competition effects from the objective point of view”.
Also the court held that “the party alleging a market dominating enterpriser’s act of abusing its status must prove that the transaction refusal has the intent and objective as an act likely to cause effects of suppressing a competition (more…)
On February 1, the Seoul Central District Court found Mr. Paul Yoo, the head of U.S. private equity fund Lone Star’s South Korean operations (Lone Star Advisory Korea) guilty of manipulating the stock price of a credit card unit of KEB. Mr. Paul Yoo was sentenced to five years in jail and ordered to be immediately detained. Also the court ordered KEB and LSF-KEB Holdings SCA, a Belgium-based unit which holds Lone Star’s stake in KEB, to pay 25 billion won ($26.50 million) each in fines, saying both secured unfair profits as a result of the stock-rigging. Lone Star said it would appeal.
It was the first court verdict in a long-running legal battle between South Korean prosecutors and Lone Star’s South Korean operations. This case is important because it could affect British-based bank HSBC’s plan to pay $6.3 billion for a majority stake of KEB, a deal which is pending regulatory approval.
But the regulatory Financial Supervisory Commission said it would delay a decision on Lone Star’s status as a top shareholder in KEB and on approving a sale of the bank until all legal issues over the fund are resolved. Actually Lone Star is fighting back to the Korean prosecutors in 2 legal trials. This case is one part of them, and the other trial involves a former finance ministry official and (more…)