[1] The meaning of the latter part of the proviso of Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11835, Feb. 1, 201) refers to the case where a person acquires or owns shares

[2] Whether the stocks acquired as a capital increase without compensation for the stocks entitled to exercise voting rights by falling under the proviso of Article 11 of the former Monopoly Regulation and Fair Trade Act or the stocks acquired through the division of such stocks shall be deemed to be the same as the stocks entitled to exercise voting rights (affirmative)

[1] In light of the legislative intent and purpose of Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 6651 of Jan. 26, 2002), text, language, and system, etc., the term “cases of acquiring or owning stocks by obtaining approval, etc. under the relevant Acts and subordinate statutes for the efficient operation and management of insurance assets” in the latter part of the proviso of Article 11 of the same Act, which is one of the grounds for exceptions to the prohibition of exercising voting rights to stocks of domestic affiliated companies acquired or owned by a company engaging in financial business or insurance business, which is a member of a large enterprise group, means cases of acquiring or owning stocks after obtaining approval, etc. under the relevant Acts and subordinate statutes, and is for the efficient operation and management of insurance assets. It does not mean cases of acquiring or owning stocks issued by a company engaging in a business closely related to the company engaging in insurance

[2] The capital increase without compensation pursuant to Article 461 of the Commercial Act is to be issued to the shareholders in accordance with the number of shares held by them, and there is no change in the economic value of shares held by the shareholders (including shares issued free of charge) without the increase in the company's property. The share split pursuant to Article 329-2 of the Commercial Act is to increase the total number of shares issued without the increase in the company's capital, and there is no substantial change in the company's capital, assets, or the status of shareholders. In light of the above, shares acquired without compensation or shares acquired through the division of such shares, which constitute the proviso to Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 6651 of Jan. 26, 2002) and thus, should be deemed to be the same as shares that can exercise voting rights.

[1] Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 6651 of Jan. 26, 2002) / [2] Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 6651 of Jan. 26, 2002)

Samsung Life Insurance Co., Ltd. (Law Firm Sejong, Attorneys Seo Sung-sung et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm Hanl, Attorneys Kim Ho-chul et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2001Nu2159 delivered on July 10, 2003

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

1. As to the shares acquired with the approval of the Minister of Finance and Economy

In light of the legislative purport and purpose of Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 6651 of Jan. 26, 2002; hereinafter the same), text, and structure of Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 6651 of Jan. 26, 200), “the case of acquiring or owning stocks by obtaining approval, etc. under the relevant Acts and subordinate statutes for the efficient operation and management of insurance assets” in the latter part of the proviso of Article 11 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11 of Jan. 26, 200), which prohibits a company belonging to a large enterprise group from exercising voting rights to stocks of domestic affiliated companies acquired or owned by a company engaging in a financial business or insurance business, means the case of acquiring or owning stocks after obtaining approval, etc. under the relevant Acts and subordinate statutes

According to evidence and records duly adopted by the court below, since the plaintiff's total 1,374,520 shares of Samsung C& 1 corporation (hereinafter referred to as " hotel C& 1") acquired with the approval of the Minister of Finance and Economy or the head of the Insurance Supervisory Board (hereinafter referred to as "the above") 1,374,520 shares per share, 28,42 shares per share of Samsung C& 28,400 shares (hereinafter referred to as "T& 100 shares per share"), 2,000 shares of Samsung Heavy Industries Co., Ltd. (hereinafter referred to as "T& 10,000 shares"), 7, 1983, 197, 176, 1700 shares issued by the former Enforcement Decree of the Insurance Business Act, and 1,700 shares acquired with the approval of the above 1,67,00 shares of the above Samsung Heavy Industries Co., Ltd. (hereinafter referred to as "the above 1, 1983 shares were approved.

Although part of the judgment of the court below is not proper, the conclusion that the plaintiff can exercise voting rights on each of the above shares acquired with the approval of the Minister of Finance and Economy is just, and there is no error of law such as misconception of facts against the rules of evidence, incomplete deliberation, omission of judgment, or misapprehension of legal principles as to the limitation of voting rights on shares of domestic affiliated companies of the insurance company, as

In addition, the evidence No. 18 (the direction of the management of voting rights to the stocks of domestic affiliated companies of a financial company and insurance company) is merely an internal report document prepared by the Fair Trade Commission's exclusive business group and its independent business group on or around June 2000 after reviewing the issues regarding the operation of Article 11 of the former Monopoly Regulation and Fair Trade Act, and it cannot be interpreted that the case falling under the latter part of the proviso of Article 11 of the former Fair Trade Act based on the contents of the above documents is limited to the case where the company operating the insurance business acquires or owns stocks issued by the company operating

2. As to shares acquired by capital increase without compensation or by share division

According to Article 461 of the Commercial Act, where reserve funds are transferred to capital increase, there is no change in the economic value of the shares held by the shareholders (including shares issued free of charge) as the number of shares is issued in proportion to the number of shares held by the shareholders in accordance with the number of shares held by the shareholders. In light of the fact that the split of shares pursuant to Article 329-2 of the Commercial Act increases the total number of issued shares without the increase of capital, and thereby there is no substantial change in the company's capital, assets, or the status of shareholders, a capital increase without compensation pursuant to the proviso to Article 11 of the former Fair Trade Act or the shares acquired through the split of such shares shall be deemed to be the same as the shares for which the voting rights can be exercised.

The court below, after compiling the adopted evidence, found the facts as stated in its holding. The court below determined that the company can exercise its voting rights on the shares 91,300 shares of the hotel Newcomer (5,000 won per share) and the shares 9,508 shares of Samsung C&C (10,000 won per share), and shares 37,930 shares of Samsung C&T acquired through the division of such shares (5,000 won per share) and shares 2,00,000 shares of Samsung Heavy Industries (5,000 won per share).

Examining the above legal principles in light of the records, we affirm the above judgment of the court below as just, and there is no error in the misapprehension of legal principles as to the omission of judgment or limitation of voting rights to stocks of domestic affiliated companies of the insurance company, as otherwise alleged in the ground of appeal.

3. Conclusion

Therefore, the appeal is 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.

Justices Kim Young-ran (Presiding Justice)