The Defendants are as follows: each Plaintiff on the claim amount and the prize amount table as indicated in the “Plaintiff” column in attached Table 1.

The term "amount of money" shall pay 5% a year from September 15, 2000 to April 16, 2008 and 20% a year from the following day to the full payment.

2. All remaining appeals by the Defendants are dismissed.

3. One-half of the total litigation costs is borne by the Plaintiffs, and the remainder is borne by the Defendants.

The Defendants shall pay to each of the Plaintiff listed in the “Plaintiff” column in the claim amount and the prize amount table in attached Table 1. The amount of money indicated in the “Plaintiff” column to each of the Plaintiff, 5% per annum from September 15, 200 to the date of final delivery of the complaint of this case, and 20% per annum from the next day to the date of full payment.

2. Purport of appeal

The part of the judgment of the court of first instance against the Defendants shall be revoked, and all of the plaintiffs' claims corresponding to the above revocation shall be dismissed.

The following facts do not conflict between the parties, Gap evidence 1 through 3, evidence 13, evidence 16, evidence 28 through 37, evidence 39, evidence 51, evidence 52, evidence 54 through 58, evidence 54 through 58, evidence 4, 8, 10, 12, 18, 224, 27, evidence 59-1, 27, Gap, 5, 6, 11, 19, 23, 25, 53-1, 1, 23, 3, Gap evidence 14, 15-1 through 5, Gap evidence 20-5, evidence 1 through 5, 26-1, 7-5, 7-1, 7-5, 7-5, 7-1, 7-5, 7-5, 7-5, 7-7, 7-5, and 53-5

A. Status of the parties

(1) Joint Defendant Treatment Heavy Industries Co., Ltd. in the first instance trial (hereinafter “Treatment Heavy Industries”) is a company established for the purpose of manufacturing, installing, and selling various machinery, apparatus, and their accessories. At the time of 197, five sectors of shipbuilding, comprehensive machinery, national vehicles, commercial vehicles, and buses are operated. On October 23, 2000, Treatment Heavy Industries shares were divided into 60.58% of the processed Heavy Industries shares, 21.34% of the processed Heavy Industries shares, and 18.08% of the processed Heavy Industries shares and 18.08% of the processed Heavy Industries shares were divided into 60.58% of the processed Heavy Industries shares, 21.34% of the processed Heavy Industries shares, and 18.08% of the processed Heavy Industries still remains as a company operating the delisting portion after being declared bankrupt by the Incheon District Court on April 15, 2005.

(2) Defendant 1 served as the representative director of the Daewoo Heavy Industries from March 25, 1995 to October 23, 200, and Defendant 2 was in charge of accounting as a director of the Treatment Heavy Industries from February 28, 1998 to January 31, 200.

(3) The Plaintiffs are investors who traded shares, such as purchase of shares on the securities market of the Daewoo Heavy Industries as stated in each “purchase” column in attached Table 2. The Plaintiffs are investors who sold or held shares as stated in the “sale (holding)” column.

(b) settlement of branches of the treatment Heavy Industries;

(1) The settlement of accounts for the fiscal year of the 35-year period;

As a result of the provisional settlement of accounts with respect to the 35 business years (197 fiscal year) at the end of January 1998, treatment Heavy Industries stated that its equity capital has been completely impaired as of 9:47.19 billion won; 9.54.8 billion won; 9.8 billion won; 9.8 billion won in total; 3 billion won in total; 9.3 billion won in total; 9.7 billion won in total; 9.3 billion won in total; 9.8 billion won in total; 9.3 billion won in total; 98 billion won in total; 9.3 billion won in total; 9.3 billion won in total; 98 billion won in total; 9.3 billion won in total; 9.7 billion won in total; 9.3 billion won in total in total in each sector; and 98 billion won in total; and 9.3 billion won in total in total; and 9.7 billion won in total in each sector in total; and 9.3 billion won in total amount in total; 9.9.3 billion in total amount in total, nine billion in each sector in total.

(2) The settlement of accounts for the fiscal year of the 36th fiscal year;

As a result of the provisional settlement of accounts with respect to the 36 business years of the end of January 1999 (1998 year), treatment Heavy Industries: (a) its equity capital is KRW 13.51 billion; (b) its liabilities is KRW 1.175.3 billion; (c) its net loss is KRW 1.9888 billion; (d) its net loss is KRW 37 billion; and (e) Defendant 1, as described in the preceding paragraph, reported the estimates of profits and losses for each business sector, which Defendant 2 took place at KRW 36 billion; and (e) prepared the financial statements for the 36th business years of 1999 (1998 year); (e) prepared the financial statements for the 36 billion net income to be published at KRW 1,61 billion; (e) prepared the financial statements for the 199 billion total amount of KRW 27.2 billion for each business sector; and (e) prepared the financial statements for the 199 billion total amount of KRW 1.4 billion per 9 billion total amount of KRW 3 billion; and (e.3 billion per 3 billion total amount of KRW 3 billion.

(c)the publication of the liquidity crisis and the window dressing accounting of the Treatment Group;

(1) The Treatment Group had experienced difficulties in raising funds due to the business of the IMF crisis. On July 22, 1998, the Financial Supervisory Commission regulated the issuance limit of commercial papers (hereinafter referred to as the "CP"), and on October 28, 1998, restricted the issuance of corporate bonds of large companies by setting the limit of holding financial institutions with respect to corporate bonds issued by large companies. On October 29, 1998, labor stock issued by a foreign financial company as a financial company was distributed to the Treatment Group with an emergency level (Aarlar Doro Group, No No. 6957, Robro Group, and No. 577). However, the Financial Supervisory Commission, on October 29, 1998, distributed a report on the liquidity crisis of financial institutions, which was the first day after the issuance of corporate bonds by the Treatment Group, was the most likely risk of the liquidity group's corporate bonds collapse and the treatment group's corporate bonds collapse.

(2) On December 19, 1998, financial institutions affiliated with the Treatment Group's major claims council entered into an agreement for sound management and financial restructuring of the Treatment Group's affiliates. On January 1999, domestic credit rating companies entered into an agreement for the sound management and financial restructuring of the Treatment Group's affiliates. Around January 1999, the domestic credit rating companies announced the credit rating of the issuance of the treatment Group's corporate bonds to BB (B). On April 16, 1999, the Financial Supervisory Commission considered the Treatment Group as the "Infaith Group".

(3) On July 199, the Treatment Group announced "the plan to accelerate the restructuring of the Treatment Group and to implement specific tasks" with the content that, on July 19, 1999, the liquidity shortage of the Treatment Group is serious, the Treatment Group provided security to the claim group of 10.134.5 billion won shares, real estate shares, etc. owned by Kim Jong-ro on July 19, 199, the Treatment Group provided reorganization of the Treatment Group as a specialized group in the automobile sector, and that it separates affiliates to become independent. The creditor financial institutions provided 4 trillion won to the Treatment Group in the form of the CP purchase and the acquisition of corporate bonds, while the CP back to the maturity after this day came to extend the maturity for six months.

(4) On August 26, 199, the company improvement work for the affiliates of the Treatment Group including the Treatment Heavy Industries was commenced, and the audit work for the affiliates of the Treatment Group was commenced. On October 22, 1999, there was a newspaper newspaper that was anticipated that the liabilities of the Treatment Group were in excess of its assets. On October 26, 1999, the company's actual asset value of the affiliates of the Treatment Group, including the Treatment Heavy Industries, was 30 trillion won or more in total with the book value on the daily newspaper. On October 28, 1999, the company's total asset value was 19 billion won or more, and the company's total asset value was 19 billion won or more than 30 billion won in the daily newspaper. The company's total asset value was 19 billion won or more than 13 billion won in the daily newspaper, and the company's total asset value was 222 billion won or more than 199 billion won in the daily newspaper.

D. Criminal punishment against the defendants

From December 9, 199 to August 31, 200, the Financial Supervisory Commission conducted special supervision with respect to the affiliates of the Treatment Group and six accounting corporations, including the Busan East Accounting Corporation, in charge of the accounting audit of the company, and announced the result on September 15, 200, and accused Defendant 1, 2, etc. of criminal charges. Accordingly, in the case of Seoul High Court 2001No2067 on January 25, 2002, Defendant 1 was found to have committed a crime of violating the Act on External Audit of Stock Companies, which punished false statements in audit reports by directors, auditors, and external auditors, and Defendant 2 was sentenced to a suspended sentence of imprisonment for two years and six years and three years under a suspended sentence of imprisonment for two years and became final and conclusive.

2. Determination

A. Determination as to the defendants' main safety defense

The Defendants asserted that Article 16 of the former Securities and Exchange Act (amended by Act No. 5982, May 24, 1999; hereinafter referred to as the "Securities and Exchange Act") provides that the liability for damages, such as the submission of the business report and directors, etc., due to false statements in the business report, etc., shall be extinguished when the claimant does not exercise his/her right within one year from the date when he/she became aware of the fact. In July 1999, when the process of structural improvement of the company against the Treatment Heavy Industries started, the Plaintiffs, who were widely known in the world, had known the fact that the process of window dressing accounting of the Treatment Heavy Industries was about the 35th business report and the 36th business report at that time, shall be deemed to have known the fact that the 35th business report of the Treatment Heavy Industries was false at that time. Since the Defendants were charged with liability for damages due to false statements in the business report, etc., the lawsuit of this case against the Defendants shall be unlawful since it was filed on October 24, 200000.

According to Articles 186-5, 16, and 14 of the Securities and Exchange Act, if a purchaser of securities suffers damage due to a false description or representation of any material fact in the business report or failure to enter or indicate any material fact therein, the person who submitted the business report, the corporation and its directors, etc. shall be liable for such damage. The above liability for damages is extinguished if the claimant fails to exercise the right to claim within one year from the date on which he became aware of the fact. Here, the "date on which he became aware of the fact" means the time when the claimant actually knows the fact of false entry or omission in the business report. If the general public can be aware of the fact of such false entry or omission in the business report, it is reasonable to view that the claimant actually knew of such fact unless there are special circumstances. Rather, it is reasonable to view that the fact of false entry in the business report was known to the general public on or around October 26, 1999, as alleged by the Defendants.

B. Occurrence of liability for damages

(1) Defendants’ liability for damages

According to the facts acknowledged above, since the 35th and 36th annual business report of the Daewoo Heavy Industries had false statements or indications, the defendants are liable for damages suffered by the plaintiffs who acquired stocks in the open market after the disclosure of the documents, as directors of the treatment Heavy Industries at the time of the submission of each of the above annual business report, in accordance with Articles 186-5 and 14(1)1 of the Securities and Exchange Act.

(2) Judgment on the defendants' assertion

(A) The Defendants asserted that the claim for damages under Article 14 of the Securities and Exchange Act is limited to those who have acquired the securities in the market of public offering or sale, and that those who have acquired the securities in the market of distribution is not recognized. The Plaintiffs are not those who have acquired the stocks in the market of issuance, and thus, they do not recognize the claim for damages under

In order to ensure fairness in the trading of securities and protect investors, the Securities and Exchange Act has a system that requires an issuer of securities to promptly and accurately disclose the contents of securities, such as the content of the securities and the assets and management status of the issuing company, and as a part of such disclosure system, Article 186-2 (1) of the same Act provides that “stock-listed corporations, Association-registered corporations, and other corporations prescribed by the Presidential Decree shall submit business reports to the Financial Supervisory Commission and the Stock Exchange or the Association within 90 days after the end of each business year.” Article 186-5 of the same Act provides that Articles 14 through 16 of the same Act shall apply mutatis mutandis to the liability for damages caused by false entry, etc. in a statement of securities market, such as false entry, shall apply mutatis mutandis to the person who acquired the securities at the issuing market. Thus, the Defendants’ assertion that Article 14 of the Securities and Exchange Act

(B) The Defendants also held office as the representative director or director of the Daewoo Heavy Industries, but they did not have a position to grasp the financial situation because Kim Jong-J separately left the director in charge of finance and managed all the documents, etc., and even if they knew of this, the Defendants did not expect corrective actions against their will, as they were corporate owners, it cannot expect to do so. Thus, they did not hold liability for damages.

However, in light of the aforementioned roles performed by the Defendants in relation to the false preparation of the business report of the Daewoo Heavy Industries, the Defendants’ assertion that the Defendants did not have a position to grasp the financial status of the Daewoo Heavy Industries is without merit. Furthermore, there is no evidence to acknowledge that the Defendants could not expect the Defendants to perform corrective acts against the intent of the business owner. Therefore, the Defendants’ assertion is without merit

(C) The Defendants asserted that, in the market, the share price is determined by the rules of supply and demand, taking into account various complex elements such as the financial situation of the company, the size of the company, the future nature of the company, etc., and that, even before the fact of the window dressing accounting of the Daewoo Heavy Industries was published, the fact of window dressing accounting had already been known to investors through a door, and that treatment Group had experienced a liquidity crisis, since around October 1998, the publication of the fact of window dressing accounting would no longer affect the share price of the Daewoo Heavy Industries. Accordingly, the Plaintiffs’ damages should not be caused by window dressing accounting, but by social, market and economic factors, and the plaintiffs’ yellow dust.

In a case where a purchaser of stocks claims compensation for damages caused by false statements in a business report against a stock-listed corporation, etc. based on the provisions of Article 14 of the Securities and Exchange Act applied mutatis mutandis by Article 186-5 of the same Act, the purchaser of stocks does not need to prove the existence of causation between false statements in a business report and the occurrence of damages pursuant to Article 15(2) of the Securities and Exchange Act, and to exempt the stock-listed corporation from liability (see Supreme Court Decision 2002Da38521, Oct. 11, 2002).

In addition, the proof of "non-existence of a causal relationship between damages" under Article 15 (2) of the Securities and Exchange Act can be done by means of proving that an illegal act, such as the pertinent false disclosure, directly at issue, did not have any influence on the occurrence of damages, or caused all or part of damages by any other factor than the pertinent illegal act, such as false disclosure, etc. In this case, if the illegal act, such as false disclosure, is assumed to have not been published based on the data prior to the disclosure at the market, it can be presumed that the expected return of profit and normal share price, which can be predicted if the illegal act, such as false disclosure, was presumed to have not been published, and it can be used to analyze whether the publication of the illegal act is a statistically significant degree of impact on the share price. However, in light of the legislative intent of the presumption of damages as above, it cannot be viewed that the price of the shares purchased after the illegal act, such as false disclosure, reduced after the price decline, and that the pertinent illegal act was not clear.

According to the evidence Nos. 1, 1, 2, 4 (the same shall apply to the evidence No. 11), and 6 of this case, a press report of October 26, 199 using the research method of this case has reached a conclusion that the media report of October 26, 199 on the accounting facts of the Daewoo Heavy Industries using the research method of this case did not have a statistically meaningful influence on the share price of the Daewoo Heavy Industries. However, the research method of this case where the date of publication of the window dressing Heavy Accounting is deemed the date of publication of the window dressing Accounting is based on the logical premise that the stock price did not have any influence on the share price because the fact of window dressing accounting was not entirely known in the market before the date of publication, and if the window dressing accounting or similar financial information was sufficiently reflected in the stock price before the date of publication, it is difficult to avoid any influence on the share price.

(6) If it was found that the company’s net losses were incurred at KRW 2.82 billion due to the 9-197 Financial Transactions Group’s false financial statements or 197 financial statements that it had not been known that the company had been affiliated with the company’s financial statements or 9.7 billion won, and that the company’s equity capital had not been increased to KRW 2.8,97 billion, such as processed assets, and that the company’s new financial statements or 9.7 billion won had not been increased to KRW 9.7 billion, the company’s new financial statements or 9.7 billion, which had not been known that the company’s new financial statements or 9.7 billion would not have been issued. The company’s new financial statements or 9.7 billion capital would have been increased to KRW 9.7 billion, as the company’s new financial statements or 9.7 billion, the company’s new financial statements or 9.7 billion net losses would have been increased to KRW 1.97 billion,500,000.

Therefore, it cannot be deemed that the appraisal report using the research method of the case alone proves that there is no causation between the window dressing accounting of the treatment Heavy industry and the damage suffered by the plaintiff in the business report. Therefore, the defendants' causation does not exist. Thus, the plaintiff's assertion that there is no causation is without merit except for the part of damage with no causation as examined later.

C. Scope of damages

(1) The acquisition period of the stock with a causal relationship

The plaintiffs seek compensation for damages caused by the acquisition of stocks by reliance on the business report which was falsely entered and announced to the Korea Stock Exchange pursuant to Article 14 of the Securities and Exchange Act. The 35 business report was submitted to the Korea Stock Exchange on March 31, 1998 and the 36 business report was submitted to the Korea Stock Exchange and was publicly announced on March 31, 199, and the 36 business report was widely known to the general public on October 26, 199, the fact that the results of the inspection of the Daewoo Heavy Industries were no later than November 4, 1999 when the results of the inspection were officially announced on November 14, 1999. The general investors who invest in stocks were deemed to have duly prepared and publicly announced the business report containing the financial statements that indicate the most well-known financial status of the company in question, and were naturally formed on the basis that the share price was limited to the shares of the company (see Supreme Court Decision 9Da19538, Nov. 24, 1997).

On the other hand, the Defendants asserted that, since since October 1998, the treatment group had experienced liquidity crisis and the deterioration of its financial status had widely spread in the stock market, the financial statements of the treatment Heavy Industries did not function as the basis for investment judgment, and that there was no causal link between the false facts in the business report and the losses that the Plaintiffs acquired after November 1998. Therefore, the treatment group suffered from liquidity crisis after the IMF, and the Treatment Group did not adopt the above regulations on the issuance of the CPS and the restriction on the holding of corporate bonds against the financial institutions on October 28, 1998. The Plaintiffs were not aware of the above fact that the treatment group had not been engaged in the above 9B financial statements of the treatment group on October 29, 198, and that there was no serious measure to restrict the holding of corporate bonds against the above financial institutions on the 9th anniversary of the issuance of the treatment group's financial statements to the customers of the treatment group on September 19, 1998.

(2) Method of calculating damages

The Defendants claim damages under Article 15 of the Securities and Exchange Act, and individually specify at any time whether the shares that the Plaintiffs suffered from the price fluctuation are the shares that they purchased. Since the Plaintiffs do not specify “the relevant securities” at all, they claim that the Plaintiffs’ claim is groundless.

However, under the current securities depository settlement system, if a specific securities are deposited at the Korea Securities Depository, it cannot be specified by mixing them with other securities of the same kind in the current moment. In the case of the sale and purchase of deposited securities, the seller or the purchaser cannot specify the securities which are the purpose of the sale and purchase. Only the type, issue, and quantity of securities are designated and traded, and there is a problem that a person who acquired the securities can not specify the securities he acquired.

However, since the stock price established by the Korea Stock Exchange is extremely variable to be determined by very diverse factors such as the supply and demand of the quantity of stocks inside the stock market and the external conditions of the stock market, it is difficult to prove the causal relationship because it is not easy to prove the causal relationship because of the decline caused by the false disclosure during the stock price fluctuation, the Securities and Exchange Act provides the amount of damages to be compensated for as “where the claimant disposes of the securities in question at the market price or the closing of argument at the time of closing of argument in the acquisition of the securities concerned, the price after deducting the disposal price thereof” (Articles 186-5 and 15(1)), and the causal relationship is difficult to prove that the claimant did not prove the causal relationship between the false statements in the business report and the damage caused by the decline in the stock market and the external conditions of the stock market. Thus, it is difficult to establish the Plaintiffs’ claim for compensation for the specific amount of damages in accordance with the purpose of Article 186-5(2) of the Securities and Exchange Act to individually calculate the purchase price and the specific amount of the securities in question.

(3) The non-existence of causation among damages

Meanwhile, in a case where a false statement of the contents of the financial statements stated in the business report is widely known in the stock market, and the share price fluctuation after the formation date of normal share price is formed as a result of removal of all the share price supported by such false information, there is no causation with the false disclosure, barring special circumstances. Thus, in a case where it is confirmed that the pertinent shares were sold after the formation date of normal share price or continued to be held until the closing date of oral argument, the difference between the above normal share price and the actual disposal price (or the market price at the closing date of oral argument) among the damages under Article 15(1) of the Securities and Exchange Act shall be deemed as proved by the absence of causation under Article 15(2) of the Securities and Exchange Act. In this case, the amount of damages shall be the amount calculated by deducting the share price on the date of formation of the above normal share price from the purchase price (see Supreme Court Decision 2005Da60246, Oct. 25, 200

In light of the following facts, Gap evidence 61, Eul evidence 1, Eul evidence 4 (the same as Eul evidence 11), Eul evidence 6, and the overall purport of the arguments as to the president of the stock exchange, experts who reviewed whether the accounting of the treatment Heavy Industries had influenced the share price as a result of the fact inquiries by the court of first instance were recorded on the 19th day before and after October 26, 199, which was recorded on the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day after the 2nd day after the 19th day after the 19th day after the 19th day after the 19th day after the 19th day.

(4) Calculation of damages

As seen earlier, if the plaintiffs calculated the specific amount of damages for each plaintiff with respect to their shares purchased from March 31, 1998 to October 25, 1999, the difference between the purchase price and the sale price in the case of the portion disposed of before November 9, 1999 among the shares purchased from March 31, 199 and the shares purchased from October 25, 199 shall be the amount of damages, and as regards the portion disposed of after November 9, 199, the difference between the purchase price and the sale price shall be the amount of damages. < Amended by Presidential Decree No. 16583, Oct. 23, 2000; Presidential Decree No. 17090, Oct. 58, 200; Presidential Decree No. 17083, Mar. 34, 201; Presidential Decree No. 17095, Nov. 9, 199>

(5) Limitation of liability

Article 15 of the Securities and Exchange Act provides for the presumption of the amount of damages to be compensated as seen earlier and the burden of proof of causation to the person liable for compensation. However, even in the damages claim lawsuit to which this provision applies, there is no difference in the application of the basic ideology of the Damage Compensation Act, such as fair apportionment of damages, so it is still possible to limit the liability based on the equitable principle on the ground that the victim has been negligent in contributing to the occurrence and expansion of damages. In particular, considering that there is extremely diverse and multiple factors at the same time, it is extremely difficult to estimate which specific factors have any influence at any time, other than the illegal acts such as false public disclosure, etc., it may be extremely difficult to prove the daily amount of damages arising from such other circumstances in light of the principle of fair apportionment of damages (see, e.g., Supreme Court Decision 2006Da166786, Jun. 16, 207).

With respect to this case, since the public health department and business report are basically prepared by data provided by the pertinent corporation, it is difficult to readily conclude that Korean companies are accurately disclosing the corporation's financial status. Moreover, since Korean companies are often engaged in window dressing accounting for the purpose of getting loans from financial institutions, evading taxes, or raising funds for non-financial purposes, the investors should gather not only the business report but also various information that inform the company's management condition, business activities, futureity, etc. in making decisions, and even though the plaintiffs are known to the general public to the extent that the financial status of the Daewoo Heavy Industries is not lost differently from the business report due to various measures taken by creditor financial institutions, credit rating companies, and the Financial Supervisory Commission before and after the purchase of the stocks, the plaintiffs continued to acquire the stocks of the Daewoo Heavy Industries, and it is recognized that the changes in the overall situation of the Daewoo Heavy Industries or the stock market after the purchase of the stocks of the Plaintiffs were affected by the damages. In light of the principle of fair compensation system, the defendants' liability should be limited to 60% of the damages suffered by the Plaintiff.

D. Sub-committee

Therefore, the amount of the cited money for each of the Plaintiffs is the amount indicated in the “amount of damage” column in the claim amount and the quoted amount table by 60%, and therefore, the Defendants are obligated to pay to each of the Plaintiffs the amount stated in the “amount of personal use” column and to pay damages for delay calculated at the rate of 5% per annum as prescribed by the Civil Act from September 15, 2000 to April 16, 2008, which is the date of a decision of an appellate court, to dispute over the existence and scope of the Defendants’ obligation to pay, as the Plaintiffs seek against each of the above “amount of personal use” column, and as they seek, from September 15, 200 to the date of full payment.

3. Conclusion

Therefore, the plaintiffs' claims against the defendants shall be accepted within the scope of the above recognition, and the remaining claims shall be dismissed without merit. Since the part against the defendants ordering payment in excess of the above recognition amount among the judgment of the court of first instance that has partially different conclusions is unfair, it shall be revoked, and the plaintiffs' claims corresponding to the revoked part shall be dismissed, and the remaining appeals by the defendants shall be dismissed without merit. It is so decided as per Disposition.

[Attachment Table 2, 3, and 4 omitted]

Judges Signature Number (Presiding Judge) Kim Dong-dong-Appellee