[2] The method of determining whether an act of assistance constitutes “transaction under substantially favorable conditions” in a case where the normal interest rate in the act of assistance is not specified in detail

[2] Even if normal interest rates on the act of assistance cannot be specified specifically, in cases where, compared to the act of assistance between the applicant and an independent financial institution that does not have a special relationship with him or between unrelated parties, there are transactions having conditions of superior advantage in terms of time, type, transaction character, etc., but in terms of maturity or credit standing, etc., the normal interest rate on the act of assistance is higher than the interest rate applied to the transaction that has conditions of superior advantage. Thus, if the interest rate applied in the act of assistance is lower than the interest rate applied to the transaction that has conditions of superior advantage, it may be considered when determining whether the act of assistance constitutes a transaction under significantly favorable terms.

1. Ground of appeal No. 1

A. On September 30, 2002, as to the part of the lower-ranking lending act of the Plaintiff Gold Industry Co., Ltd., Asia and Aviation Co., Ltd., and the part of the lower-ranking lending act of September 30, 2002

In determining whether a transaction constitutes a transaction under substantially favorable terms under Article 23(1)7 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315, Dec. 31, 2004; hereinafter “the Act”), the normal interest rate, which serves as the basis for determining whether a transaction is substantially advantageous to benefits and consideration, shall be determined specifically and individually by comprehensively taking into account not only the difference between benefits and consideration, but also economic benefits, the period of, number of subsidies, the timing and timing of, and the economic situation in which an applicant is provided at the time of providing assistance, etc. In addition, the normal interest rate applied to a transaction under the same or similar circumstances between the applicant and the applicant in terms of the same or similar circumstances, such as the time, type, scale, and credit conditions, should be determined based on the difference between the applicant and the applicant’s independent financial institution and the relevant independent financial institution, and the burden of proof should be determined based on the normal interest rate applied to the transaction under the same or similar circumstances such as the timing, type, size, and credit conditions.

However, according to the reasoning of the judgment below, the court below determined that the corrective order, etc. for each of the above transactions cannot be deemed unlawful merely on the ground that the defendant did not specify the normal interest rate which was used as the basis for determining unfair support in the written resolution, or did not present the objective basis or standard for the normal interest rate indicated in accordance with the calculation standard set out in the guidelines for examining unfair support act, and that it cannot be said that the existence of the normal interest rate is not necessarily premised on the establishment of unfair support act.

However, according to the above legal principles and records, since the defendant presented interest rates on each of the above transactions as normal interest rates. In such a case, the court below should have judged whether the above interest rates presented by the defendant constituted normal interest rates that can be compared to the actual application rates of each of the above transactions, and whether each of the above transactions was a transaction with significantly favorable terms, but should have rejected the above plaintiffs' assertion seeking revocation of corrective order, etc. on the ground of the above reasons. In this case, the court below erred by misapprehending the legal principles on the necessity for establishing normal interest rates and the burden of proof, which affected the conclusion of the judgment, and the grounds of appeal pointing this out are with merit.

B. As to the part concerning the purchase of subordinate bonds of the Plaintiff Geum Industrial Co., Ltd., Asia Aeronautical Ship Co., Ltd., the part concerning the lower-ranking lending of the Plaintiff Geumho Petroleum Chemical Co., Ltd., the part concerning the Plaintiff Geumho Petroleum Co., Ltd. on December 27, 2001 and the part concerning the lower-ranking lending of April 1, 2002

The lower court also determined that each of the above transactions was a transaction under substantially favorable terms without comparing the actual applicable interest rate and the normal interest rate, on the grounds as seen earlier.

However, even though each of the above transactions and the time, type, size, maturity, credit standing, etc. of the plaintiffs cannot be found in the same or similar situation, and therefore, it cannot specify the normal interest rate of each of the above transactions specifically between the applicant and an independent financial institution that does not have any special relationship with him/her or between an independent financial institution that does not have any special relationship with him/her, in terms of the time, type, and nature of the transaction, etc. of the plaintiffs compared to each of the above transactions, in cases where there is a transaction with the applicant and an independent financial institution that does not have special relationship with him/her, the normal interest rate of each of the above transactions is higher than the interest rate applied to the transaction with a superior priority condition in terms of maturity, credit condition, etc., and thus, it is reasonable to consider in determining whether each of the above transactions constitutes a significantly favorable condition for the plaintiffs.

In light of the records, Plaintiff 1 and Plaintiff 2’s annual rate of 0.0% on March 31, 199, each of the above-mentioned 20.0% of the annual fixed rate of 13.5 billion won and the above-mentioned 20.4% of the annual fixed rate of 0.0 billion won and the above-mentioned 10.0% of the annual fixed rate of 10 billion won and the above-mentioned 20.4% of the annual fixed rate of 0.0 billion won and the above-mentioned 10.0% of the annual fixed rate of 10 billion won and the above-mentioned 20.7% of the annual fixed rate of 10 billion won and the above-mentioned 20.4% of the annual fixed rate of 0 billion won and the above-mentioned 10.7% of the annual fixed rate of 10.0 billion won and the above-mentioned 1.47% of the annual fixed rate of 200 million won and the above-mentioned 10.7% of the above rate of interest rate of the Plaintiff

Therefore, the reasoning of this part of the judgment below is somewhat inappropriate, but the decision of the court below which rejected the plaintiffs' assertion that each of the above transactions is not recognized as significant, is justified, and there is no violation of the rules of evidence or incomplete deliberation as to the possibility and appropriateness of calculating the individual normal interest rate in each of the above support activities, as otherwise alleged in the ground of appeal. Therefore, this part of the grounds of

2. The second ground for appeal

In determining whether an act of assistance is unfair, the relationship between the support entity and the support entity, the purpose and intent of the support act, the structure and characteristics of the market to which the support entity belongs, the size and duration of the support, restrictions on competition in the market to which the support entity belongs, and the effect of concentration of economic power, etc. shall be comprehensively taken into account, and whether the relevant support entity’s relevant market is likely to impede competition or cause concentration of economic power, etc. (see Supreme Court Decision 2004Du7610, Jan. 25, 2007, etc.).

In light of the following circumstances acknowledged by the record, i.e., (i) the act of lending subordinated petroleum from Plaintiff Franchisor on December 27, 2001, and (ii) the above Plaintiffs and Franchisor were affiliated companies belonging to an enterprise group as of April 1, 2002; (iii) the market situation was bad to the retirement of 12 insurance companies due to restructuring of life insurance companies after the IMF financial crisis; (iv) the Franchisor was three consecutive years until the business year until the 1999-201 and the 199-202 business year after the 20th anniversary of the 199-10th anniversary of the 20th anniversary of the 194th anniversary of the 196th anniversary of the 196th anniversary of the 2nd anniversary of the 196th anniversary of the 2nd anniversary of the 2nd anniversary of the 3nd anniversary of the 2nd anniversary of the 3nd anniversary of the 199th anniversary of the 3rd financial crisis.

In addition, as alleged by the plaintiffs, the Financial Supervisory Service had the plaintiffs, who are the major shareholders of gold-free life and gold comprehensive financial business, conduct each of the above transactions, and even if the financial institution's subordinate financial transaction conditions are practically managed by the Financial Supervisory Service, it is nothing more than the purport that the financial soundness ratio should be improved in accordance with the "standards for Economic Liability of Major shareholders of insolvent financial institutions" applicable to the major shareholders of insolvent financial institutions, and it does not purport that the plaintiffs should provide funds to gold-free life and gold comprehensive financial business at a significantly lower rate than normal interest rate. The determination of interest rate or return rate in each of the above transactions by the plaintiffs was voluntarily decided with the plaintiffs, and therefore, it is difficult to view that the above administrative guidance is unfair from the perspective of fair trade order.

Therefore, this part of the plaintiffs' grounds of appeal is without merit.

3. Ground of appeal No. 3

In light of the above legal principles as to the illegality of the act of assistance, since the principal of each subordinate fund transaction claimed by the plaintiffs can be deemed to fall under the scope of support amount, interest arising from the difference between normal interest rate and actual application rate, not only the principal of each subordinate fund transaction but also the interest arising from the difference between normal interest rate and actual application rate is an important factor to determine the illegality of the act of assistance. Accordingly, the grounds for appeal by the plaintiffs on the premise that the interest arising from the difference between normal interest rate and actual application rate is not related to the illegality of the act of assistance are also groundless.

4. Ground of appeal No. 4

In full view of the provisions of Articles 6, 17, 22, 24-2, 28, 31-2, and 34-2 of the Act, the Fair Trade Commission has discretion to determine whether to impose penalty surcharges on violations of the Act, and if penalty surcharges are to be imposed, the amount of penalty surcharges should be determined specifically within a certain scope prescribed by the Act and the Enforcement Decree. Thus, the Fair Trade Commission's imposition of penalty surcharges on violations of the Act is discretionary action. However, if there are grounds such as misconceptions of the facts constituting the basis for the imposition of penalty surcharges in exercising discretion, or violation of the principle of proportionality and equality, it is illegal as a deviation from and abuse of discretionary power (see Supreme Court Decisions 200Du1713, Sept. 24, 200; 2004Du12315, May 12, 2006; 2008Du1681, Feb. 14, 2006).

A. As to the part on the purchase of subordinate bonds of the Plaintiff Franchischemmmmmmmm powder, Plaintiff Franchism industry, and Asia’s aviation

In light of the following circumstances acknowledged by the record, namely, the defendant calculated and imposed penalty surcharges for each of the above support activities of the plaintiffs, and the fact that the above plaintiffs provided capital to the gold life and gold comprehensive finance at a remarkably low price through each of the above support activities, even if the above plaintiffs' assertions are in the grounds for appeal, it is recognized that the defendant imposed penalty surcharges for each of the above support activities of the above plaintiffs within the scope prescribed by the Act and the Enforcement Decree, and it is not deemed that the defendant exceeded or abused discretion, such as violating the principle of proportionality and equality, in determining whether to impose penalty surcharges and the amount thereof.

B. As to the part on the Plaintiff’s subordinated lending act

According to the records, the defendant can recognize the fact that the defendant imposed a single penalty surcharge on the above subordinated lending acts by the plaintiff Shoeman. Among them, since they are not significantly favorable conditions, they include subordinated lending acts on September 30, 2002, which cannot be viewed as an act of support, and there are insufficient materials to calculate the penalty surcharge only on the basis of the remaining subordinated lending acts recognized as an act of unfair support. Thus, the above plaintiff's order of penalty surcharge payment against the above plaintiff should be revoked in its entirety.

C. Therefore, this part of the plaintiffs' grounds of appeal are justified within the above scope of recognition.

5. Conclusion

Therefore, of the judgment below, the part of the judgment below against the plaintiff Geumho Industrial, Asia's subordinate lending activities, and the part of the judgment against the plaintiff Geumho-si is reversed, and that part of the case is remanded to the Seoul High Court. The appeal against the plaintiff Geumho Petroleum Chemical and the appeal against the plaintiff Geumho-ho Industrial, and the remaining appeals against Asia and ASEAN are dismissed, respectively. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Hwang-sik (Presiding Justice)