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The appeal is dismissed.
The costs of appeal are assessed against the defendant.
Reasons
The grounds of appeal are examined.
1. As to the grounds of appeal Nos. 1 and 2
A. Article 40(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11609, Jan. 1, 2013; hereinafter “former Inheritance Tax Act”) provides, “In cases where any of the following profits is acquired by converting into or exchanging stocks with convertible bonds, bonds with warrant (referring to warrant certificates if they are separated) or other stocks, or by issuing bonds entitled to take over stocks (hereinafter “convertible bonds, etc.”), the amount equivalent to such profits shall be deemed the value of property donated to the person who has obtained such profits.” Article 40(1) of the former Inheritance Tax and Gift Tax Act provides, “In cases where the largest shareholder of the corporation that issued convertible bonds, etc. or his/her specially related person, who is a shareholder, has acquired and acquired stocks in excess of the number entitled to receive convertible bonds, etc. under equal conditions in proportion to the number of stocks owned by the corporation (including cases where he/she has acquired and acquired them from an underwriter, etc. under Article 9(12) of the Financial Investment Services and Capital Markets Act; hereinafter referred to as “acquisition, etc.”):
B. In full view of the adopted evidence, the lower court acknowledged the fact that the instant company issued bonds with warrants in the form of private placement on July 14, 2010, and that D (hereinafter “D”) acquired bonds with warrants from the instant company on the same day and immediately sold them to the Plaintiff with the instant preemptive right separated from the said bonds, and on the grounds delineated below, D was subject to the amendment by Act No. 11845, May 28, 2013; hereinafter “former Capital Markets Act”).