2013 Gohap 20213 Revocation of a resolution of the special shareholders' meeting

A

B A.

June 27, 2014

July 11, 2014

1. The resolution made on November 14, 2013 by the Defendant as to whether to appoint additional auditors shall be revoked at a special shareholders’ meeting on November 14, 2013.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Basic facts

A. The defendant is a company aimed at providing and selling computer system services, and the plaintiff is the defendant's shareholder. On the other hand, the defendant's shares are 31,000 shares (51.76%) as representative director, 25,390 shares (42.3%) as the plaintiff, 1,810 shares (31%) as D, and 1,80 shares (3%) as E.

B. On October 17, 2013, the Plaintiff filed a request for convening an extraordinary general meeting of shareholders with the Defendant’s representative director C to certify that “the purpose of the meeting is to change the articles of incorporation (Article 26 of the Articles of incorporation, the number of directors of the company, the number of directors of the company to be changed to two), the case of the appointment of a new executive director in addition to the agenda No. 2, and the case of the appointment of a new executive director in addition to the agenda No. 3,” pursuant to Article 366(1) of the Commercial Act, “the reasons for convening the meeting is to change the number of directors to two persons through the revision of the articles of incorporation for the objective management and accounting audit of the company and to appoint additional directors and auditors.”

C. On October 24, 2013, the Defendant’s representative director C notified the Plaintiff, A, and D, who is the Defendant’s shareholder, of the convocation of the meeting, that the purpose of the meeting was to be changed by the Articles of Incorporation, the case of additional appointment of directors, and the case of additional appointment of auditors as stated in the Plaintiff’s request for convocation of the meeting.

D. On November 14, 2013, C, the chairman of the Defendant’s temporary general meeting of shareholders, presented the issue as to whether all the shareholders of the Defendant attended and held a general meeting of shareholders (hereinafter “temporary general meeting of shareholders”) to appoint an additional auditor. The above agenda was rejected as opposed to a majority of the shareholders present at the above temporary general meeting of shareholders (hereinafter “the resolution of this case”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1, 2 and 8, the purport of the whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion

The resolution of this case shall be revoked inasmuch as the convocation procedure or resolution method violates the Acts and subordinate statutes for the following reasons.

1) The Defendant, upon the Plaintiff’s request, issued a notice of convening an extraordinary general meeting of shareholders by designating the agenda of the meeting as the case of additional appointment of auditors, so the instant extraordinary general meeting of shareholders must adopt a resolution to appoint auditors according to the purpose of convening the general meeting, but the Defendant passed a resolution on whether to appoint additional auditors, not the matter of convening the general meeting

2) A shareholder who holds shares exceeding 3/100 of the total number of issued and outstanding shares, other than nonvoting shares, pursuant to Article 409(2) of the Commercial Act, could not exercise his/her voting right at the time of appointing an auditor with respect to the shares in excess, but the Defendant avoided the limitation on the appointment of an auditor by a resolution without such restriction on whether to appoint an auditor.

B. Determination

1) Whether a resolution is made on matters other than the purpose of convening the Assembly

The defendant, upon the plaintiff's request, convened the provisional shareholders' meeting of this case as "the case of additional appointment of auditors". According to the evidence No. 3-1 and No. 2 of this case, the plaintiff recommended F as a candidate for auditors to be discussed on October 29, 2013, which is prior to the holding of the provisional shareholders' meeting of this case. However, the purpose of the provisional shareholders' meeting of this case is only "the case of additional appointment of auditors," but it does not aim at the resolution of appointment of auditors for a specific candidate, so "the appointment of additional auditors" is included in the agenda or incidental contents of the "election of auditors", and the number of auditors at the time of the general shareholders' meeting does not fall short of the prescribed number of auditors (the number of auditors at the time of the general shareholders' meeting can be defined as one or more under the articles of incorporation). Thus, the resolution of this case may not be included in the provisional shareholders' meeting of this case as to whether the appointment of auditors is necessary before the resolution of appointment of a specific candidate.

2) Whether a resolution on whether to appoint an additional auditor is unlawful by a general resolution

Article 409(2) of the Commercial Act provides that "no shareholder who holds more than 3/100 of the total number of issued and outstanding shares other than nonvoting shares may exercise voting rights in appointing auditors on the excess shares."

Article 409(2) of the Commercial Act is introduced to the effect that the exercise of voting rights by a major shareholder is restricted in relation to the appointment of auditors. Thus, the above provision shall be deemed to apply to all resolutions related to the appointment of auditors including whether to appoint auditors (or, as seen earlier, so long as it is deemed that the additional appointment is included in the agenda of the meeting, it is reasonable to interpret the above provision of the Commercial Act that limits voting rights in the appointment of auditors applies to the resolution of this case regarding whether to appoint auditors. If it is interpreted that the above provision applies only to the case of a resolution for appointment of a specific candidate, if a major shareholder is recommended by a candidate against his/her own will, it would result in the exercise of voting rights without any restriction such as additional appointment, and thus, it would be dismissed that the purport of the above provision of the Commercial Act is to maintain the independence of auditors by restricting the voting rights of the major shareholder with respect to the appointment of auditors.

According to the above facts, the resolution of this case on whether to appoint additional auditors at the time of the provisional shareholders' meeting of this case, and the shareholders holding not less than 3/100 of shares issued by this case exercised their voting rights on all of their shares, so the resolution of this case is unlawful as it is in violation of Article 409(2) of the Commercial Act, and thus, the resolution of this case is revoked as it is unlawful, and it does not constitute a case where the cancellation of the resolution of this case is inappropriate solely on the grounds asserted by the defendant in this case.

3. Conclusion

Then, the plaintiff's claim is reasonable, and it is decided as per Disposition by admitting it.

The senior judge of the presiding judge;

Judges Nam-jin

Judges Senior Superintendent General