Korean Bank (Attorney Ro-won, Counsel for the plaintiff-appellant)

Hyundai Securities Co., Ltd. (Law Firm Rate, Attorneys Cho Jong-chul et al., Counsel for the defendant-appellant)

December 13, 2002

Seoul District Court Decision 2001Gahap53139 Delivered on July 5, 2002

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the plaintiff.

1. Revocation of a judgment of the first instance;

2. A. The primary purport of the claim is to pay to the plaintiff 2,082,750,683 won with 6% per annum from December 23, 1999 to June 5, 2002, and 25% per annum from the following day to the date of full payment.

B. Preliminary claim: The defendant shall pay to the plaintiff the amount of 2,104,57,456 won and the amount of 6% per annum from February 18, 2000 to June 5, 2002 and 25% per annum from the following day to the date of full payment.

1. Basic facts

The following facts are not disputed between the parties, or there is no dispute between the parties, and there is no evidence as to Gap evidence 1-1-5, Eul evidence 2-1-2, Gap evidence 3-4, Eul evidence 6-1-2, Gap evidence 7-1 through 6, Gap evidence 9, Gap evidence 10-1-2, Eul evidence 1-2, Eul evidence 3-1-5, Eul evidence 4-2, Eul evidence 8-1-2, Eul evidence 1-2, Eul evidence 8-1 and 10, and the fact-finding with respect to the Korean Investment Trust Corporation for operation of the political party, and there is no reflective evidence.

A. In accordance with the Securities Investment Trust Business Act, the non-party 1, a truster company that operates an investment trust (hereinafter “Korea Light Investment Trust Business”) concluded each of the securities investment trust agreement (hereinafter “each of the securities investment trust agreements of this case before separation”) on October 15, 1997 with the Plaintiff bank, a trustee company (Korea Light Bank, Korea Light Bank, Inc.) (hereinafter “Korea Light Bank”).

B. On October 17, 1998, the Plaintiff purchased each beneficiary certificate from the Defendant, a selling company of the beneficiary certificates issued by Han Han-Shan Short-Term Bond Investment Trust 3, the beneficiary certificates of Han-to-Shan Short-Term Bond Investment Trust 3, May 24, 1999, the beneficiary certificates of Han Han-to-Shan Short-Term Bond Investment Trust H-11, May 26, 199, the Plaintiff purchased each beneficiary certificates of Han Han-to-Shan Short-Term Bond Investment Trust H-2, “The beneficiary certificates and the H-4, July 6, 1999.”

C. However, since July 23, 1999, financial markets unstable, such as the rapid aggravation of the financial situation of the Treatment Group and the rapid increase in the redemption of the investment trust products from around July 23, 1999, the investment trust association and the Korea Securities Dealers Association filed an application for approval of postponement of redemption including the following redemption measures with respect to the beneficiary certificates of an investment trust for which the Treatment Group Claim was incorporated with the Financial Supervisory Commission on August 12, 1999 in order to prevent liquidity crisis due to large redemption requests and confusion in the financial market. On the same day, the Financial Supervisory Commission approved the postponement of redemption of beneficiary certificates (hereinafter referred to as “beneficiary certificates”) and entered into the enforcement of the said postponement measures from the 13th of the same month.

(d) The major contents of the measures to postpone redemption of beneficiary certificates are to pay in cash immediately as much as the incorporation ratio of non-treated group claims in the fund upon request for redemption of investors' beneficiary certificates is to postpone redemption; however, the subject matter of postponement is limited to non-guaranteed company bonds and non-guaranteed company bonds (CP) and to guaranteed company bonds or security cl (CP) out of the treatment group bonds, and excludes the subject matter of postponement of redemption from the subject matter of postponement of redemption; ① The method and amount of postponement of redemption from the date of August 13, 1999 to the date of market assessment after July 1, 200 (if it is possible to settle such accounts as early normalization of the Treatment Group, from the date of request for redemption, to the date of early redemption of the outstanding amount after 0.0% of the outstanding amount of redemption of the beneficiary certificates held by an individual or general corporation; ② The amount of redemption from the date of request for redemption to the date of 20.0% of the final settlement of accounts as of August 19, 1999>

E. According to the above disposition of postponement of redemption of beneficiary certificates, unlike individuals and general corporations, financial institutions including the Plaintiff are expected to delay redemption of beneficiary certificates equivalent to the ratio of incorporation of treatment bond certificates, and solely receive redemption only at the market price after July 1, 200, and cause enormous losses. Accordingly, the investment trust association has requested measures to cover losses to the investment trust association, etc. while strongly violating the above disposition of postponement of redemption of beneficiary certificates. Accordingly, as a means to cover losses of the financial institutions like the Plaintiff after consultation with financial supervisory organizations, the investment trust association, as a means to cover losses of the financial institutions such as the Plaintiff, made it possible for financial institutions to simply separate or separate the investment trust to hold 10% of beneficiary certificates and convert them into the stock-type investment trust if the beneficiary so wishes, so that the trust can be converted into the stock-type investment trust as it remains (the existing bond-type investment trust becomes divided into three different types, such as a simple bond-type investment trust, separated bond-type investment trust, and a stock-type investment trust after conversion).

F. On January 7, 200, the Plaintiff, at his own option, separated from the bond-type investment trust prior to the separation of this case to the Defendant according to its beneficiary certificate ratio, and then the beneficiary applied for conversion into the stock-type investment trust of this case to the Plaintiff alone. Accordingly, the bond-type investment trust prior to the separation of this case was divided into the stock-type investment trust (hereinafter in this case, the stock-type investment trust after the separation of this case) with the approval of the Financial Supervisory Commission on January 10, 200, as follows:

After the change of the name of investment trust in the name of the investment trust in the main sentence before the change of the name of the securities contained in the main sentence, K-4 G-4 G of the oil short-term mixed investment trust in the name of Korea and short-term and short-term and mixed investment trust in the name of Korea and short-term and short-term and mixed investment trust in the name of Korea and short-term and short-term and mixed investment trust in the name of Korea and short-term and mixed investment trust in the name of Korea and short-term and mixed investment trust in the name of Korea and short-term and short-term and mixed investment trust in the name of Korea and short-term and mixed investment trust in the name of Korea and

G. Some of the terms and conditions applicable to the bond-type investment trust prior to the instant separation (hereinafter “former terms and conditions”) were modified as follows after obtaining approval from the Financial Supervisory Commission. Before applying for the separation of the bond-type investment trust of this case and conversion into the stock-type investment trust, the Plaintiff sought explanation of the terms and conditions applicable to the stock-type investment trust (hereinafter “new terms and conditions”) after the separation from the Defendant, the dealer of the beneficiary certificates of this case, and filed an application for separation and conversion as described in the above paragraph.

(1) Important terms and conditions of the terms and conditions

- Article 16 (Redemption of Beneficiary Certificates) (1) When a beneficiary intends to request redemption of beneficiary certificates, he shall make a request to the sales company, its business, shop, etc. of the selling company which purchased the beneficiary certificates: Provided, That where the beneficiary is unable to comply with redemption due to dissolution, cancellation of permission, etc. of the management company, he may make a direct request to the trustee under Article 7 (1) of the Act, and where the selling company is unable to comply with redemption due to dissolution, etc., he may make a direct request to the management company or the trustee company under Article 7

(2) Where beneficiaries claim redemption of beneficiary certificates, the distribution company shall repurchase the beneficiary certificates with the base price as of the date of claim for redemption, and pay the redemption price in cash at the sales office of the distribution company: Provided, That when it is impossible for the distribution company to pay the redemption price with its assets because of large amount of claim for redemption of beneficiary certificates, the distribution company may pay the redemption price within

(3), (4) omitted

Article 25 (Partial Termination of Investment Trust) (1) Every distribution company may request partial termination of the Investment Trust when the grounds falling under any of the following subparagraphs accrue:

1. When beneficiary certificates issued remain unsold;

2. Where the beneficiary certificates repurchased in accordance with the provisions of Article 16 have not been re-saleed;

3. When the selling company is unable to pay the redemption price because of large amount of claims for redemption of beneficiary certificates; and

(2) Where part of this investment trust is terminated, the amount of termination shall be the amount commercialized by the truster company by the disposal, etc. of the trust property corresponding to the number of termination units on the business day following the date on which the request for termination is made, and the amount of termination shall be paid in cash within four business days from the date when the selling company requests it: Provided, That where there is any property not disposed of,

(2) Important terms and conditions of new terms and conditions

Article 16 (Redemption of Beneficiary Certificates) (1) When a beneficiary intends to request a redemption of beneficiary certificates, he/she shall make a request to the truster company (or selling company), its business shop, etc. of the truster company which purchased the beneficiary certificates: Provided, That when the beneficiary is unable to comply with the request for redemption due to dissolution, cancellation of permission, etc. of the truster company, he/she may directly make a request to the trustee company under Article 7(1) of the Act, and when the selling company is unable to comply with the request for redemption due to dissolution, etc., he/she may make a direct request to the truster company

(2) Where a beneficiary claims redemption of beneficiary certificates, the truster company (or selling company) shall repurchase such beneficiary certificates at the base price for the third business day from the date of the claim for redemption, but the redemption price shall be paid in cash at the business offices of the truster company (or selling company) within the fourth business day from the date of the claim for redemption: Provided, That when it is impossible for the truster company (or the truster company) to pay the redemption price within 15 days from the date of the claim for redemption because

- Article 16bis(The target profit ratio, etc.) (1) The target profit ratio shall be the (9)%.

(2) The target profit ratio under paragraph (1) shall be determined by [the treatment ratio (the non-treatment ratio on August 13, 199,/ the non-treatment ratio on August 13, 199) x 100] and the minority shall be cut off. In such cases, the term "the treatment division" means the non-guaranteeable and non-mortgaged claims issued by the treatment group affiliated companies and the non-mortgaged CP as of August 13, 199, and the non-treatment division means the division excluding the treatment ratio of investment trust property: Provided, That the target profit ratio shall be five percent if the target profit ratio is less than five percent.

(3) Where the target profit ratio referred to in paragraph (1) is achieved, the treatment sector shall be evaluated as the final settlement price at the time the treatment sector can settle.

- Article 20 (Operation of Investment Trust Property) (1) A truster company shall invest and manage the investment trust property in any of the following ways:

1. The investment in stocks (including stocks outside the country) and one lightD special stocks, investment trust, fund-raising trust, trust beneficiary certificates shall not exceed 50% of the investment trust property (hereinafter referred to as "over-the-counter stocks");

-Article 25 (Partial Termination of Investment Trust) (1) When issued beneficiary certificates are not sold, the selling company may request the truster company to terminate part of the investment trust, and when beneficiary claims redemption of beneficiary certificates, the selling company must request the truster company to terminate part of the investment trust.

(2) Where a truster company receives a request for partial termination of an investment trust from a selling company, the termination amount shall be the amount encashed by the disposal, etc. of the trust property corresponding to the number of termination units, and the truster company shall terminate it by applying the base price for three business days from the date of request for termination, and the truster company shall pay the proceeds for partial termination of the trust

(3) Notwithstanding the provisions of paragraph (2), if it is impossible to comply with partial termination due to any property not disposed of, among the trust property subject to termination, the base price for the second business day from the date the trust property is disposed of, shall be terminated, and the trust enterprise shall pay to the selling company the price for partial termination of the trust property within three business days from the

H. Meanwhile, under the former Securities Investment Trust Business Act (amended by Act No. 558 of September 16, 198; hereinafter the same shall apply), a truster or dealer which received claims for redemption with respect to the redemption method shall pay the redemption price in cash within 15 days from the date of such claims. In this case, it is allowed to acquire gains from changes in the base price if it complies with its own assets (Article 7(1), 2, (4), and 30 of the former Act). (2) The base price of beneficiary certificates, which serves as the basis for determining redemption prices, was calculated by dividing the total amount of assets appropriated in the trust account as of the date of public announcement by the total number of units of beneficiary certificates as of the date preceding the date of public announcement, and by the amended provisions of the former Act No. 97 of the Enforcement Decree of the Securities Trust Business Act (amended by Presidential Decree No. 10653, Apr. 1, 2008; hereinafter the same shall apply).

I. On December 22, 1999, the Plaintiff filed a claim with the Defendant for the redemption of the entire investment trust before separation, and filed a claim for the redemption even on February 17, 2000 after separation and conversion of the investment trust.

(j) On April 27, 2001, and August 17, 2001, the Defendant demanded the termination of the entire investment trust to Han Light business entity, a truster company, for the entire termination of the investment trust, but Han Light business entity did not take measures to dispose of the trust property up to now.

C. Meanwhile, as of August 21, 2001, the Plaintiff purchased and held the beneficiary certificates issued by one light business operator through the Defendant as follows.

In the name of a securities investment trust in the main sentence, the account number of the remaining subscription units of the securities investment trust Nos. 301-024752 280,0552 280,0555 187,845,845,08 G in the Oil Short-Term Mixed Investment Trust Nos. 3 001-0527 G in the name of the securities investment trust in the main sentence, and 187,8455 187,845,845,088 G in the Oil Short-Term Mixed Investment Trust H-101-039651 58,950,950,787 G in the Oil Short-Term Mixed Mixed Investment Trust No. 2001-040636,096 G in the name of the securities investment trust in the main sentence. 221,643,096

2. The parties' assertion

A. The plaintiff's assertion

(1) Mainly, the separation and conversion of the bond-type investment trust prior to the separation of this case is merely merely a mere separation of the shares of the investment trust for each beneficiary certificate holder, and it does not have created a new investment trust or created a new legal relationship. Thus, the bond-type investment trust prior to the separation of this case and the stock-type investment trust after the separation of this case do not actually change. Since the bond-type investment trust prior to the separation of this case was created between October 15, 1997 and October 27, 198 respectively, the old law and the old terms and conditions apply to the redemption of the beneficiary certificates of the investment trust, and the defendant, the selling company, has the obligation to repurchase with its own property. Thus, the defendant asserted that the defendant is liable to pay interest for delay as to the share of the beneficiary certificates remaining at present upon the claim for redemption as of December 22, 1999 by the base price as of December 22, 199.

(2) If it is determined that the Plaintiff’s declaration of intention of redemption on December 22, 1999 was withdrawn as of January 10, 200 by the separation and conversion of the bond-type investment trust prior to the separation into shares on January 10, 200, the Plaintiff is obligated to pay the amount of 2,104,57,456 won at the price calculated by multiplying the number of units of remaining beneficiary certificates by the base price of February 17, 200, as the Plaintiff filed a second claim for redemption on February 17, 200 after the conversion.

B. Defendant’s assertion

In this regard, the defendant asserts that the plaintiff filed an application for the separation and conversion of the trust property on January 7, 200 with respect to the bond-type investment trust before the separation of this case, and the declaration of intent to claim redemption on December 22, 199 shall be deemed to have been withdrawn. Since the stock-type investment trust of this case, which was separated on January 10, 200 and converted on January 10, 200, has been established based on a new terms and conditions, since the new law and modified terms and conditions apply to the redemption of the above investment trust, the defendant who is a selling company shall not be obliged to repurchase with its own property, and shall be obliged to respond to the claim for redemption only on the basis of the amount created by the termination of part of the trust from the truster company, and the defendant shall not be obliged to pay the redemption price, since the

3. Determination

A. Judgment on the plaintiff's primary claim

(1) The nature of the stock-type investment trust after the separation of this case

(4) According to the fact that the Plaintiff filed a separate claim for redemption of the bonds before and after the 199.12.2 of this case with the beneficiaries of this case, the Plaintiff’s separate claim for redemption of the bonds before and after the 20th of December, 199. However, according to the fact that the separate claim for redemption of the existing shares before and after the 10th of July 1, 200, the Plaintiff’s separate claim for redemption of the new shares from the existing shares of this case was made after the 10th of July 1, 200, and the changed terms and conditions of this case’s investment trust, including the changed terms and conditions of the investment trust after the 1st of August 12, 1999, were to be separated from the new shares of this case’s investment trust, and the changed terms and conditions of this case’s new shares were to be separated from the new shares of this case’s investment trust after the 1st of July 1, 2000.

(2) If so, the plaintiff's primary claim alleged from another position is without merit.

B. Judgment on the Plaintiff’s conjunctive claim

(1) On February 17, 200 after the separation and conversion of the bond-type investment trust of this case into the stock-type investment trust, the Plaintiff filed a claim against the Defendant for redemption of each beneficiary certificate of the stock-type investment trust (hereinafter the instant beneficiary certificates) after the separation of this case. As seen earlier, it becomes a matter of whether the Defendant is liable to redeem the instant beneficiary certificates with its own proprietary property as alleged by the Plaintiff.

(2) Therefore, as seen earlier, the method of redemption under the new and old laws differs from each other. Thus, examining whether the new and old laws apply to the Plaintiff’s claim for redemption of the instant beneficiary certificates, first of all, the enforcement date of the new laws on the redemption system due to partial termination of the trust is from September 16, 199 pursuant to the “Regulations on the Application Date of the Rules on Beneficiary Certificates under Article 2 of the Addenda of the New Act and the Revised Rules on the Repurchase Certificates under the Revised Rules of the Revised Rules of the Revised Rules on the Redemption of Securities Investment Trust Business”. After the separation of this case, the existing investment trust after the separation of this case has been converted from the existing investment trust after partial alteration of the terms and conditions from the new and new bonds type investment trust in this case established prior to the enforcement date of the new law to the existing investment trust after the partial alteration of the terms and conditions, but the beneficiary certificates in this case after the separation of this case are not “beneficiary certificates issued under the newly established or modified terms and conditions” after the date of application of the new laws.

However, examining the relevant provisions of the former Act on Redemption of Beneficiary Certificates in detail, the former Act only provides the basis for the truster or distributor to redeem the bonds from its proprietary property to the base price calculated by the method of appraisal (see Articles 7(1) and (3), 30 of the former Act, and Article 12 of the former Enforcement Decree of the Act). Since it cannot be deemed that the former Act is mandatory, it does not immediately apply to the selling company, and therefore, the former Act does not have the obligation to repurchase with its proprietary property. Rather, when the former Act was enacted based on such statutes, “if a beneficiary claims redemption from a beneficiary, the beneficiary’s own property shall be determined as the base price assessed by the appraisal method, and the obligation to pay a redemption price on the date of the claim for redemption shall be determined as the redemption price on the date of the claim for redemption” (see Articles 16(2) and 25 of the former Terms and Conditions), it can be deemed that the selling company has the obligation to repurchase with its inherent property as a result of incorporation into the obligation under the terms and conditions.

(3) If so, the existence of the obligation to repurchase its proprietary property against the selling company shall be determined in accordance with the contents of the new terms and conditions. After the separation of the shares, Article 25(1) of the new terms and conditions shall apply. However, Article 25(1) of the old Terms and Conditions shall be deleted from Article 25(1)2 of the old Terms and Conditions (when the beneficiary certificates redeemed under Article 16 are not re-sale), and subparagraph 3 (when the selling company is unable to pay the redemption price due to large amount of claims for redemption of beneficiary certificates, it shall request the truster company to partial termination of the investment trust (Article 25(1) of the new terms and conditions). On the other hand, the truster company shall be obligated to pay part of the redemption bond terms and conditions from the date of request for redemption to the selling company for the new terms and conditions [Article 25(2) of the old Terms and Conditions and Conditions and the trust company shall be obligated to pay part of the redemption bond terms and conditions from the date of request for redemption to the selling company for the new terms and conditions of the trust property [Article 25(3) of the new terms and conditions.

However, although the defendant demanded the termination of the trust on April 27, 2001 and August 17, 2001 for the non-party 1, who is a trust company, the above light dumping does not take measures to dispose of the trust property up to now, as seen above, the above facts are as follows. Accordingly, the plaintiff's preliminary claim for redemption of the beneficiary certificates of the stock investment trust after the separation of the case, by the defendant's proprietary property, is without merit.

4. Conclusion

Therefore, the plaintiff's claim of this case is dismissed in its entirety as it is without merit, and the judgment of the court of first instance is just in its conclusion, and it is so decided as per Disposition by the court below.

Judges Jeon Soo-soo (Presiding Judge) (Presiding Judge)