The judgment below

The part against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

1. Regarding the plaintiffs' grounds of appeal

A. As to the grounds of appeal Nos. 1 and 2, Article 144-11(2)2 of the former Indirect Investment Asset Management Business Act (amended by Act No. 8635, Feb. 4, 2009; hereinafter “former Indirect Investment Act”) prohibits an act of unfairly soliciting an executive partner of a private equity fund (including executives and employees of a corporation in cases where the executive partner is a corporation) to become a partner by promising to guarantee the principal or a certain amount of profit, etc. (hereinafter “the promise to guarantee profit”). Article 184 subparag. 27 of the former Financial Investment Services and Capital Markets Act (amended by Act No. 1348, Jul. 24, 2015; hereinafter “former Indirect Investment Services and Capital Markets Act”). Article 272(6)2 of the former Financial Investment Services and Capital Markets Act (amended by Act No. 1348, Jul. 24, 2015; hereinafter “former Indirect Investment Act”).

The term "the former Indirect Investment Act" means the Act enacted to revitalize indirect investment and contribute to the development of the national economy (Article 1); and the term "the act of collecting funds, etc. from investors and operating them in assets and devolving the results on investors."

(Article 2 subparagraph 1 of the former Indirect Investment Act and a private equity fund which is permitted to be established for such indirect investment is a private equity fund established by inviting not more than 50 persons to become partners in a way that allows them to become unspecified persons (Article 144-2(1)), and “a limited partnership established in accordance with the Commercial Act for the purpose of raising the value of the invested company by investing the company’s property in stocks, equity shares, etc. in the management right, business structure or governance improvement, etc. and distributing profits therefrom to its members.”