However, in light of the fact that Article 2 subparag. 13 of the former Indirect Investment Act provides that “the beneficiary certificates and stocks of an investment trust” as “indirect securities,” and Articles 47(1) and 47(2) of the former Indirect Investment Act provide that beneficial rights of an investment trust shall be equally divided and indicated as beneficiary certificates, and that beneficiaries shall have equal rights depending on the number of units of beneficiary certificates with respect to the redemption of trust principal and the distribution of profits, etc., it is reasonable to deem that “matters that may have significant impacts on the value of indirect investment securities” in the case of an investment trust refers to important matters that greatly reduce the possibility of realizing rights with respect to the redemption of trust principal and the distribution of profits, etc. of investment trust principal. Moreover, whether any matter affects “serious negative impacts” should be determined by comprehensively taking into account the characteristics of indirect investment securities, the methods of operating investment trust assets, the generation of profits, expected profits, the level of risk, the value of provided security, and

1. According to Article 57(1)5 of the former Indirect Investment Asset Management Business Act (amended by Act No. 8516 of Jul. 19, 2007; hereinafter “former Indirect Investment Act”) and Article 55(1)2 of the Enforcement Decree of the said Act (amended by Presidential Decree No. 20462 of Dec. 28, 2007), the company selling indirect investment securities and the executive officers and employees in charge of the sales business of indirect investment securities shall not, with prior knowledge of matters that may seriously affect the value of indirect investment securities, sell them to investors without notifying investors. Article 182 subparag. 10 of the former Indirect Investment Act provides that those violating the said provision shall be punished.

However, in light of the fact that Article 2 subparag. 13 of the former Indirect Investment Act provides that “the beneficiary certificates and stocks of an investment trust” as “indirect securities,” and Article 47(1) and (2) of the former Indirect Investment Act provides that beneficial rights of an investment trust shall be equally divided and indicated as beneficiary certificates, and that beneficiaries shall have equal rights depending on the number of units of beneficiary certificates with respect to the redemption of trust principal and the distribution of profits, etc., in the case of an investment trust, the term “matters that have significant impacts on the value of indirect investment securities” means important matters that greatly reduce the possibility of realizing rights with respect to the redemption of trust principal and the distribution of profits, etc. of investment trust principal. Moreover, whether any matter has a “serious negative impact” should be determined by comprehensively taking into account all the circumstances, such as characteristics of indirect investment securities, the methods of operating investment trust assets, the generation of profits, expected profits, the risk level, the value of provided securities, and the matters that

2. According to the evidence duly adopted by the court below, ① the ○○○○○○○○ Mutual Aid Association was solicited by the Defendant to invest in the business of establishing and selling a charnel house for Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) (hereinafter “Nonindicted Co. 1”) and invested KRW 30 billion out of the total amount of KRW 80 billion in priority to purchase the beneficiary certificates of “Puss private equity trust 3” (hereinafter “the instant fund”). ② When selling the beneficiary certificates of the instant fund No. 3, the Defendant was ○○○○○ Mutual Aid Association in charge of the instant investment trust’s loan amount of KRW 8 billion, the amount of debt owed by Nonindicted Co. 1 to the ○○○○○○○○○ Mutual Aid Association was able to smoothly implement the instant charnel project by completing the construction of the remainder of the amount of debt owed by Nonindicted Co. 1, 200,000,000 won, which was KRW 100,000,000,00 won.

3. We examine these facts in light of the above legal principles.

The possibility of realizing the right to repay the trust principal of the instant fund and distribute profits therefrom depends on the possibility of collecting the principal and interest of the instant funds to Nonindicted Company 1. This seems to be directly related to the failure of the instant charnel fund business. However, it is clear that the Defendant, despite being aware of in advance, did not notify to the ○○○○○ Mutual-Aid Association, that a fund exceeding KRW 80 billion is needed for the normal sale of a charnel house of Nonindicted Company 1, and that an investor of the lower 30 billion won was not determined. It is the circumstance that the instant fund’s repayment of the existing debt and the shortage of funds necessary for the completion of the instant construction, which is the premise of collecting the principal and interest of the instant funds, mean the shortage of funds necessary for Nonindicted Company 3’s normal charnel house sales. In light of the method of operating the instant funds, the generation of profits, the shortage of funds provided, and the size of funds, etc., such circumstance may seriously affect the significant negative value of the possibility of collecting the principal and interest of Nonindicted Company 1.

In the same purport, the lower court is justifiable to have determined that the instant facts charged were guilty, and contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the interpretation

4. Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Shin (Presiding Justice)