Whether the auditor can be exempted from the audit duty on the grounds of the discretion of the business judgment on the company's violation of the laws and regulations (negative), and whether the company's audit duty rules provide for the prior audit duty prior to the approval of the final approver, and whether the auditor can be exempted from the audit responsibility on the grounds of the lack of approval procedure or the arbitrary business

Articles 382(2), 391-2, 402, 412(1), 414(1), and 415 of the Commercial Act; Article 681 of the Civil Act

The bankruptcy trustee, who is a joint bankruptcy trustee, more than the joint bankruptcy trustee, more than the joint bankruptcy trustee, who is a joint bankruptcy trustee, more than the joint bankruptcy trustee, more than the joint bankruptcy trustee, and more than the joint bankruptcy trustee, who is a court of first instance, and the Korea Deposit Insurance Corporation

Defendant (Law Firm, Kim & Lee, Attorneys Lee Jong-chul et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Na6490 delivered on August 26, 2005

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

An auditor of a stock company shall audit the performance of duties of a director, and if a director commits or is likely to commit an act in violation of Acts and subordinate statutes or the articles of incorporation, he/she shall report it to the board of directors, and if a director acts in violation of Acts and subordinate statutes or the articles of incorporation and such act is likely to cause irreparable damage to the company, he/she shall demand maintenance of such act (Articles 412(1), 391-2, 402 of the Commercial Act). The auditor shall perform the above duties under the Commercial Act or other duties under the Acts and subordinate statutes or the articles of incorporation with due care as a good manager. If a director neglects his/her duties in violation of the duty of care as a good manager, he/she shall be liable for damages suffered by the company (see Articles 414(1), 415, 382(2) of the Commercial Act, and Supreme Court Decisions 2002Da60177, Mar. 26, 2004>

In full view of all the circumstances such as the details of audit duties of the bankrupt corporation, Oreung Credit Guarantee Fund (hereinafter referred to as the "Bankruptcy Company"), the bankrupt company's holding limit in violation of Article 18-2 subparagraph 1 of the former Mutual Savings and Finance Company Act (amended by Act No. 6429 of March 28, 2001), the details and period of transactions, and the details of the audit conducted by the defendant, etc., the court below held that the bankrupt company is liable to compensate for damages sustained by the bankrupt company as a result of its failure to audit the purchase and disposal of securities such as securities and securities index futures trading for speculative purposes beyond the holding limit in violation of Article 18-2 subparagraph 2 and 3 of the former Mutual Savings and Finance Company Act, Article 9 (1) subparagraph 2 of the Mutual Savings and Finance Company Supervision Regulations (amended by Act No. 6429 of March 28, 2001).

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Ill-sook (Presiding Justice)