2. The costs of lawsuit are assessed against the Plaintiff.

A. The "non-party company" registered to the KOSDAQ on February 17, 2004 with the company engaged in the manufacture, export, and import business, etc. of textile products, such as bags.

B. On January 9, 2006, the non-party company opened a board of directors to resolve to issue new shares of 745, 890 shares to 5 specific persons including the plaintiff, 2,680 won per share, and to issue new shares to a third party in the allotment method on January 12, 2006. Accordingly, on January 12, 2006, the non-party company allocated new shares to the above 5 (hereinafter referred to as "the allocation of new shares in this case") and received the share price. Among them, the plaintiff was allocated 179,104 shares, and paid 479,98,720 won per share.

C. The Defendant deemed to have acquired new shares at a price lower than the market price, and applied Article 39(1)1 (c) of the former Inheritance Tax and Gift Tax Act (wholly amended by Act No. 8139, Dec. 30, 2006; hereinafter “former Inheritance Tax and Gift Tax Act”), etc., Article 104, 03, 115 won (the assessed value per share after the capital increase and the assessed amount of KRW 3,249 and KRW 569 won per share of KRW 680, the difference between KRW 179,104, and KRW 313,370 per share of gift property, etc. (hereinafter “instant disposition”) to the Plaintiff on June 15, 2007.

[Grounds for Recognition: Evidence Nos. 1, 2, 3-1, 2, 4-2, A5-2, 1-1 through 4, 3-1, 2, and 4-1, 3-1, 2, and 4-2, and the purport of the whole pleadings]

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The allocation of new shares is based on the method of deemed public offering of new shares under Article 2-4 (4) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 20551, Jan. 18, 2008; hereinafter referred to as the "former Enforcement Decree of the Securities and Exchange Act"). In this case, the definition of "invitation of subscription" under Article 2-4 (5) of the former Enforcement Decree of the Securities and Exchange Act is not applicable. Even if the capital increase in this case was applied, the public announcement of the decision to issue new shares to the Financial Supervisory Service on Jan. 9, 2006 under the order of the Securities and Exchange Act was made on Jan. 12, 2006, the public announcement of the small amount public offering of new shares was made on the 13th of the same month, and the public announcement of the small amount public offering of new shares was made on the 13th of the same month, and thus, the issuance of new shares was not in violation of Article 2 (3) of the Securities and Exchange Act.

(b) Relevant statutes;

As shown in the attached Form.

C. Determination

1) Article 39(1)1 and (c) of the former Inheritance and Exchange Act provides that if new stocks are issued by a corporation to persons other than its shareholders because they increase its capital, gift tax shall be imposed by deeming the amount equivalent to such profits as the value of donated stocks of the person who acquired such profits: Provided, That a stock-listed corporation or Association-registered corporation under the Securities and Exchange Act excludes the allotment of new stocks by the method of public offering of new stocks under Article 2(3) of the same Act; on the other hand, Article 2(3) of the former Enforcement Decree of the Securities and Exchange Act and Article 2-4(4) and (5) of the former Enforcement Decree of the Securities and Exchange Act provide that if such new stocks are issued by the corporation through the public offering of new stocks or through the public offering of new stocks, it shall not be deemed that the new stocks are issued by the public offering of new stocks through the public offering of new stocks or by the public offering of new stocks through the public offering of new stocks through the public offering of new stocks through the public offering of new stocks, the public offering of new stocks or new stocks through the public offering of new stocks.

2) In light of such legal principles, since the allocation of new shares was conducted by the method of public offering of new shares under Article 2 (3) of the Securities and Exchange Act, as seen in the above 1.1., Nonparty 1’s company merely issued new shares to the specific person including the Plaintiff through the resolution of the board of directors to a third party, it cannot be deemed that it did not undergo the procedure of “invitation to subscribe” under the Securities and Exchange Act. As alleged in the Plaintiff, the disclosure of the decision to offer new shares to the Financial Supervisory Service in the electronic public disclosure system cannot be deemed as the “invitation to subscribe” under the above Act, and there is no evidence to deem otherwise that it had undergone the above solicitation procedure prior to the allocation of new shares, it cannot be deemed that the instant allocation of new shares was made by the method of public offering of new shares. Accordingly, since the Plaintiff’s assertion was not consistent with the materials to view that the instant disposition was unlawful, the instant disposition was legitimate.

Thus, the plaintiff's claim of this case is dismissed as it is without merit.

Judges Kim Jong-il

Judges Kim Jong-chul

* Former Inheritance Tax and Gift Tax Act (amended by Act No. 8139 of Dec. 30, 2006)

Article 39 (Donation of Profits Accruing from Capital Increase)

(1) Where any of the following profits is obtained as a corporation issues new stocks or equity shares (hereafter referred to as "new stocks" in this Article) in order to increase its capital (including the amount of investment; hereafter the same shall apply in this Article and Article 39-2), the amount equivalent to the relevant profits shall be deemed the value of property donated to the person who has acquired such profits:

1. In cases where new stocks are issued at a price lower than the market price (referring to the price assessed under Articles 60 and 63; hereafter the same shall apply in this paragraph and Article 40), the benefits falling under any of the following items:

(a) In case where a shareholder of the relevant corporation (including an investor; hereafter the same shall apply in this Article) has renounced wholly or partially the right to receive new stocks, and where such renounced new stocks (hereafter referred to as “ forfeited stocks” in this paragraph) are allocated (excluding the case where a stock-listed corporation or Association-registered corporation under the Securities and Exchange Act allocates them by the method of public offering of new stocks under Article 2 (3) of the same Act; hereafter the same shall apply in this paragraph), the benefits acquired by those who received the allocation of relevant forfeited stocks, by obtaining such allocation of forfeited stocks;

(c) Profits acquired by a person who is not a stockholder of the relevant corporation by directly allocating new stocks from the relevant corporation (including the case where he directly acquires and acquires the relevant new stocks from an underwriter under the Securities and Exchange Act; hereafter in this paragraph, the same shall apply), or by directly obtaining an allocation of new stocks in excess of the number entitled to be allocated under equal conditions in proportion to the number of his stocks;

* Securities and Exchange Act

Article 2 (Definitions)

(3) The term “public offering of new securities” in this Act means a solicitation of an offer to acquire securities which are newly issued under the conditions as prescribed by the Presidential Decree.

* The former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 20551 of Jan. 18, 2008)

Article 2-4 (Public Offering and Public Sale of Securities)

(1) In conducting the public offering of new securities as provided for in Article 2 (3) of the Act, the number of persons who are solicited to subscribe for securities to be issued newly shall be not less than 50.

(3) In calculating the number of 50 persons in paragraphs (1) and (2), the person who has been solicited to make an offer or a sale, or has been solicited to make an offer (hereinafter referred to as the "solicitation for an offer") for each offer, shall be aggregated with those who have been solicited to make an offer for the securities of the same class as the securities in question, without going through a public offering or sale, within the past six months from the date of solicitation for an offer, but shall be excluded from those falling under any of the following subparagraphs:

(4) Even if the number of persons who are solicited to subscribe is less than 50 and do not fall under a public offering of new securities as a result of the calculation under paragraph (3), the relevant securities may be transferred to 50 or more persons within one year from the date of issuance, and if they fall under the standards for resale prescribed by the Financial Supervisory Commission, they shall be deemed

(5) The term "invitation to subscribe" in paragraph (3) means activities, conducted in order to invite a certain person to acquire securities, of notifying that securities will be issued or sold, or providing information on the procedures for acquisition of such securities by means of advertisements through newspapers, broadcasts, lots, etc., distribution of printed matters, such as promotional leaflets and leaflets, holding a briefing session for investment, electronic communications, etc.