The costs of appeal are assessed against the plaintiffs.

1. Article 39 (1) 1 (c) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828 of Dec. 31, 2007; hereinafter referred to as the "former Inheritance Tax and Gift Tax Act") provides that in case where a person other than a stockholder of the relevant corporation obtains profits by directly obtaining new stocks from the relevant corporation or by obtaining the allocation of new stocks from the relevant corporation in excess of the number entitled to receive the allocation under equal conditions in proportion to the number of stocks held by the relevant corporation, the amount equivalent to the relevant profits shall be regarded as the value of property donated to the person who has acquired such profits.

Meanwhile, Article 39 (1) 1 (a) and (c) of the former Inheritance Tax and Gift Tax Act (hereinafter “instant provision”) provides that the issuing price of new shares shall be less than 50 per share with the issuance price of new shares 1000 per share (hereinafter “the issuance price of new shares”) shall be less than 70 per share with the issuance price of new shares 200 per share under the former Securities and Exchange Act (hereinafter “instant provision”). Article 2-4 (4) of the former Enforcement Decree of the Securities and Exchange Act (amended by the Presidential Decree No. 20653, Feb. 29, 2008; hereinafter the same shall apply) provides that the issuance price of new shares shall be less than 50 per share with the issuance price of new shares 20 per share with the issuance price of new shares 30 (the issuance price of new shares 400 or less per share) under the former Securities and Exchange Act (amended by the Financial Investment Services and Capital Markets Act) shall be less than 100 per share with the issuance of new shares.

Then, the court below held that in light of the following: (a) Article 12(1) of the former Rules on the Issuance of Securities provides for the standards for the possibility of resale to be regarded as a public offering of securities; (b) even if the provisions of the proviso of this case stipulate the possibility of resale, if the securities are protected for one year, the right of choice shall not be deemed a public offering; (c) the non-party company issued the shares allocated to the plaintiffs under the premise that they will be protected for one year; (d) the plaintiffs accepted the shares of this case; and (c) the former Rules on the Issuance of Securities and Exchange and Article 2-4(4) of the former Enforcement Decree of the Securities and Exchange Act, which are the provisions for preventing acts of avoiding various administrative regulations under the Act on the Issuance of Securities, are not considered as a public offering of securities; and (e) in the case of shares to be protected for one year, gift tax should not be imposed on the grounds that the provisions of this case’s proviso of this case’s securities are not subject to non-taxation under the same provision.

Furthermore, in light of the language, purport, etc. of Article 39(1)1(c) of the former Inheritance Tax and Gift Tax Act, the lower court determined that the market value of the instant shares ought to be evaluated in accordance with Article 63(1)1(a) and (b) of the former Inheritance Tax and Gift Tax Act as well as the shares that have not been protected for one year, even if the instant shares were protected for one year.

3. Examining the record in accordance with the aforementioned provision and related legal principles, the lower court’s aforementioned determination is justifiable. In so doing, there were no errors by misapprehending the legal doctrine on the market price of shares under the former Inheritance Tax and Gift Tax Act and the principle of equality, or by omitting judgment.

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.