naverLast December 23, the Seoul Central Prosecutors’ Office prosecuted NHN corporation, the operator of Naver (the largest Internet portal in Korea) and Daum Communications Co., the operatot of Daum for copyright infringement.

The prosecutors said two Internet portals have been aiding copyright infringement of their users by ignoring copyright holders(The Korea Music Copyright Association and the Korea Association of Phonogram Producers) request for removing illegal music files on their sites and taking no actions.  The prosecutors found 10 millions of uploaded music files (more…)

A while ago, I posted an article, titled “Starbucks Korea Sued for Music Copyright Infringement“.  Under Copyright Act of Korea, “it is permitted to play any commercial phonograms or cinematographic works in public if no benefit in turn for the relevant public performance is received from the audience or spectators”.  However this shall not be applied to all the business place.  The Copyright Act does not apply this clause to certain areas of business, such as department stores, shopping malls, airplanes, golf courses and “any places of business regulated under Food Sanitation Act(FSA) where a part of its main contents of business is the appreciation of musical or cinematographic works, being equipped with special facilities to appreciate the musical or cinematographic works”.

The Starbucks coffee shop is regulated under FSA.  The party alleging copyright infringement is arguing “‘appreciation of musical works’ is a part of main (more…)

Last week, the Korean government announced that it would initiate a reviewing process for the approval of the KEB sale soon.  Interestingly enough, today it was reported also that before the government’s announcement, Lone Star Fund had sent an official letter to the Korean government regarding the government’s approval issue on the long-waited sale of Korea Exchange Bank(KEB) from Lone Star Fund to HSBC bank.  Lone Star Fund and HSBC had entered into the stock purchase agreement and the deadline of the agreement is coming at the end of this July.  It was reported that Lone Star Fund stated in that problematic letter that if the Korean government kept delaying the approval, the fund would file a lawsuit domestically and internationally against the Korean government for the compensation of damages by the sale’s deferment(here is a news article).

Well, someone, especially western people, can say that there would be no problem in sending a letter to the other party noticing potential legal disputes.  However, it is quite unusual in Korean legal culture that a private enterprise warns the government stating otherwise it would sue the government.  Of course, it is legally acceptable and in some cases, a statutory right of a private enterprise, to file a lawsuit against the government, but culturally it is not common to take this kind of open and public action to press the government hard in Korea.

By the way, as a matter of law, the fund would be permitted to file a lawsuit to a Korean court, however, the chances are that the fund would not win the case.  Under Korean law, in order for the fund to win the case, the fund must prove there has been an unlawful act of the Korean government in delaying the approval.  But, the approval itself is a right, not an obligation, of the government provided by the law and there have been lawsuits affecting the validity of the ownership of KEB by the fund, which have made the Korean government hold the approval procedures (more…)

Recently a foreigner asked some questions to us regarding Korean employment law issues.  He has a problem in his Visa status here in Korea and the employer refused to pay some amount to him, a matter of quite frequent occurrence here in Korea, which I’m afraid of though.

Basically foreigners have the same rights as Koreans under Korean civil and/or labor law. Even though the employee does not  have a valid working Visa, it does not hinder him or her from executing his or her right under Korean law.

If the company has no justifiable cause to withhold the money earned by the employee, it constitutes a breach of contract and/or an unlawful act.  The employee can file a lawsuit against the company or put a provisional attachment on its assets.

Please note, however, that the company could threaten the employee saying “Unless you keep quiet, I’ll inform the Immigration office of your illegal stays in Korea and make you expelled!” as is often the case with vicious small entrepreneur in Korea.  Practically it is the primary reason that makes many foreigners working without visa hesitate to take legal (more…)

Today just a few hours ago, the Seoul High Court sentenced partly not guilty to the head of U.S. private equity fund Lone Star’s South Korean operations (Lone Star Advisory Korea).

Last February Seoul Central District Court had sentenced all guilty and had detained Mr. Paul Yoo, the head of Lone Star Advisory Korea, for stock rigging and misappropriation charges. Also, the court had ordered Korea Exchange Bank and LSF-KEB Holdings SCA, a Belgium-based unit that 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.

The defendants all had appealed and the Seoul Court today reversed and amended the lower court’s ruling, saying “as the Lone Star Fund did actually discuss a capital decrease in a meeting of the board of directors, there had been no falsehood in its reporting of possible capital decrease to the public and therefore no stock price manipulating”.

Also, the High court found not guilty in Mr. Paul Yoo’s tax evasion charge and also found not guilty in 2 out of 4 misappropriation charges against Mr. Paul Yoo.  Finally, the court sentenced  2 and a half year of imprisonment to Mr. Paul Yoo, however, suspended the execution for 3 years.  Mr. Paul Yoo Has been released out of prison today by the court’s decree(see the photo). (more…)

Finally the National Tax Service ruled in favor of Hana Bank in its 1.8 billion tax evasion case.  On February, NTS forced Hana Bank 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(Here is my previous post on this case).  Hana bank appealed and NTS ruled on June 6 that the merger was not a reserved merger so the bank do not need to pay the penalty.  The NTS will return the 198.3 billion won Hana Bank paid (more…)

It was reported on May 15 that Starbucks Coffee Korea was sued by the Korea Music Copyright Association for music copyright infringement.  The KMCA alleged the Starbucks played copyrighted music in its outlets without paying royalties.  The KMCA pointed out most Starbucks branches in other countries are paying copyright fees.  Starbucks Coffee Korea said the copyright issue is dealt with by headquarters in Seattle.

Here is the news article.

© 2008 Wonil Chung, a Korean Entertainment Lawyer/Chung & Partners, a Korean Entertainment Law Firm.  All rights reserved. Some copyrights, photos, icons, trademarks, trade dress, or other commercial symbols that appear on this post are the property of the respective owners.

Shareholders including civic groups led by Solidarity for Economic Reform filed a derivative suit at the Seoul Central District Court on May 28 against Hyundai Motor chairman Chung Mong-koo and vice chairman Kim Dong-jin for the damages of W563.1 billion caused by their embezzlement and breach of fiduciary duty last year.

Before their filing a lawsuit, Chung was convicted in February 2007 of embezzling almost 70 billion won. He was also found guilty of breach of duty by causing losses to the company and affiliates by helping weaker units and selling stock to (more…)

It was reported that a former senior executive at the Korean unit of Lehman Brothers, a U.S. investment banking firm, was arrested for conspiring in one of the biggest stock price manipulations in Korea.  Seoul Central Prosecutors Office said on May 5 it had arrested a 41-year-old former executive director at Lehman Brothers’ Seoul Office. (more…)

It was reported that Lone Star Fund and HSBC agreed to extend their contractual deadline for completion of HSBC’s proposed acquisition of 51.02 percent of Korea Exchange Bank(KEB) from April 30 to July 31.  HSBC had entered into a contract to buy out KEB from the Lone Star last September with a provision that either side can cancel the contract unless they obtain government approval for the sale by the end of April. Currently the Korean government has not approved the deal due to ongoing lawsuits regarding Lone Star’s alleged (more…)