[1] The form of a lawsuit on the merits of a proposed provisional disposition by a shareholder who rejected the shareholder's proposal and its eligible defendant (=company)

[2] Whether a shareholder who refuses to make a shareholder's proposal may apply for a provisional disposition to put the matter rejected for the realization of the shareholder's right to make proposal into the subject matter of the general meeting without requesting the convocation of the general meeting of shareholders (affirmative)

[3] The purpose and the method of interpreting the grounds for refusal of shareholder proposal under Articles 191-14 (3) and 84-21 (3) of the Securities and Exchange Act

[4] The meaning of "matters which are not profitable or inappropriate to be presented as a subject matter of the general meeting of shareholders" under Article 84-21 (3) 7 of the Securities and Exchange Act as one of the grounds for refusal to make a shareholder proposal, and whether the proposal itself can be deemed as having no practical benefit or inappropriate to be subject to the resolution of the general meeting of shareholders (negative)

[1] The lawsuit on the merits of a proposal that a shareholder refuses to make a shareholder's proposal is a lawsuit seeking the validity of the general meeting of shareholders convened by the company or seeking the purpose of the proposal. Therefore, the defendant eligible person is not an individual director opposed to the presentation of the shareholder's proposal as the subject matter, but a company.

[2] The claim for convening a temporary general meeting of shareholders under the Commercial Code and the claim for convening a temporary general meeting of shareholders under the Securities and Exchange Act are different in terms of the requirements and contents of exercise. The claim for convening a temporary general meeting of shareholders shall be deemed as a separate right (a minority shareholder may exercise both rights selectively) along with the shareholder's right as part of the minority shareholder's right, and the shareholder who refuses to make the shareholder's proposal shall not necessarily undergo the procedure for remedy. Thus, the shareholder who refuses to make the shareholder's proposal does not request the temporary general meeting of shareholders to convene a temporary general meeting of shareholders, without applying for a provisional disposition to put the rejected proposal into the subject matter of the general meeting of shareholders in order to realize the shareholder's right to make a temporary

[3] The grounds for refusal of a shareholder's proposal under Article 191-14 (3) of the Securities and Exchange Act and the subparagraphs of Article 84-21 (3) of the Enforcement Decree of the same Act are stipulated as exceptional provisions to prevent a clear abuse of the shareholder's proposal right. Thus, as long as the risk of abuse is not clear, the reasons should be strictly interpreted in order to realize a wide range of the shareholder's proposal right of minority shareholders, and in particular, with respect to "matters which are not profitable or inappropriate to be presented as the agenda of the general meeting of shareholders" which can be called abstract general provisions, more strict interpretation is required to prevent the abuse of the

[4] As one of the grounds for refusal to make a shareholder proposal, "matters which are not profitable or inappropriate to be presented as the agenda of the general meeting of shareholders" under Article 84-21 (3) 7 of the Enforcement Decree of the Securities and Exchange Act means matters which have already been realized or are not related to the company's interests, matters which are not relevant to the company's business, or matters inappropriate to be resolved at the general meeting of shareholders through formal judgment. Thus, the agenda whose contents are appointment of directors or auditors is itself cannot be said to have no practical benefits or inappropriate to be subject to resolution at the general meeting of shareholders.

[1] Article 52 of the Civil Procedure Act / [2] Articles 363-2 and 366 of the Commercial Act, Article 191-14 of the Securities and Exchange Act, Article 84-31 (3) of the Enforcement Decree of the Securities and Exchange Act / [3] Article 191-14 (3) of the Securities and Exchange Act, Article 84-21 (3) of the Enforcement Decree of the Securities and Exchange Act / [4] Articles 382 (1) and 409 (1) of the Commercial Act, Article 84-21 (

Applicant 1 corporation and one other (Law Firm Aju and one other, Counsel for the plaintiff-appellant)

Respondent Co., Ltd. (Law Firm Pacific et al., Counsel for the defendant-appellant)

February 27, 2007

1. The respondent shall present each of the bills listed in the annexed Form 1 proposed by the applicant as a subject matter at the regular general meeting of shareholders in March 16, 2007 or thereafter to be lawfully held.

2. The respondent shall make a notice and public notice of convening a regular general meeting of shareholders in 2007 after recording the agenda and its purport to the shareholders two weeks prior to the above amount invested.

3. Costs of application shall be borne by the respondent.

The same shall apply to the order.

1. Facts of recognition;

According to the overall purport of the record and examination of this case, the following facts are substantiated:

A. The respondent is a stock listed corporation under the Securities and Exchange Act for the purpose of manufacturing and selling medicine, non-pharmaceuticals, chemical medicine, veterinary medicine, and agricultural reservation products (the capital as of the end of the latest business year is KRW 49,345,00,000 as of December 31, 2006, and the total number of outstanding shares (ordinary shares) is KRW 9,869,000). The respondent is 252,823 weeks (applicant 141,293 + the applicant 2,511,530 shares) in total amount equivalent to at least 10/1,000 of the total number of outstanding shares of the respondent company (252,823/9,869,000).

B. Under the provisions of Article 191-14 of the Securities and Exchange Act and Article 363-2 of the Commercial Act, the applicants proposed that the respondent's directors shall make the proposal in attached Form 1 (hereinafter "the proposal in this case") as the subject matter of the general shareholders' meeting at the above general shareholders' meeting on January 30, 2007, which was six weeks before the general shareholders' meeting (hereinafter "the general shareholders' meeting in this case"), and requested that the summary of the bill in this case be stated in the notification and public notice under Article 363 of the Commercial Act (hereinafter "the proposal in this case").

C. However, on February 22, 2007, the Respondent Council made a resolution to convene the general meeting of shareholders of this case (hereinafter “instant resolution”) without presenting the instant bill as the subject matter of the general meeting of shareholders of this case, and issued a notice of convocation and a public notice accordingly.

2. Determination:

A. Determination on the standing to be a party

The respondent, whether or not to propose a shareholder proposal as the agenda of the general meeting of shareholders of this case, shall be decided by individual directors, and since the respondent company does not have to make a decision, the opposing party of the application for provisional disposition of this case shall not be the respondent company, but be individual directors opposing the presentation of the shareholder proposal as the agenda of the general meeting of shareholders. Thus, the application for provisional disposition of this case is unlawful as it lacks standing.

On the other hand, this case's provisional disposition is a lawsuit claiming the validity of the general meeting of shareholders of this case convened by the respondent company or seeking the agenda items, and therefore the defendant's qualified person is not an individual director, but the respondent. Therefore, the respondent's defense is not reasonable (In addition, although the respondent judged that the individual director's proposal is unfair and decided not to present it as an agenda item, it is not allowed as it constitutes a provisional disposition ordering the statement of the opinion of the court. However, as seen above, the provisional disposition of this case is not against the individual director, but against the respondent, so the above argument of the respondent is without merit).

B. Determination on preserved rights

(1) According to the above facts, the applicants met the requirements and procedures stipulated in Article 191-14 of the Securities and Exchange Act and Article 363-2 of the Commercial Act and proposed the shareholders' proposal to the director of the respondent. Thus, unless the grounds for exclusion of proposals stipulated in Article 191-14 of the Securities and Exchange Act and each subparagraph of Article 84-21(3) of the Enforcement Decree of the Securities and Exchange Act do not constitute the grounds for exclusion of proposals, the respondent shall propose the instant proposal as the subject matter of the general meeting of shareholders, and shall make a notice and

On the other hand, the respondent argues that a shareholder who is refused to make a shareholder proposal may submit to the board of directors a document stating the purpose of the meeting and the reasons for the meeting to request the convocation of an extraordinary general meeting, and that the shareholder who requested the meeting can convene the general meeting with the permission of the court (Article 366 of the Commercial Act). Thus, in internal relations such as shareholders and directors who are entitled to be the institution of the company and directors, the respondent should demand the proposal or protection of the right holder in accordance with the procedures permitted by the Commercial Act, and there is no reason to recognize the procedure that is not allowed until bypassing or avoiding the provision.

However, the right to request the convocation of a temporary general meeting of shareholders under the Commercial Act and the right to request the convocation of a temporary general meeting of shareholders under the Securities and Exchange Act differ from the requirement and contents of exercise. Thus, the right to request the convocation of a temporary general meeting of shareholders shall be deemed separate rights (the minority shareholders may exercise their two rights selectively) along with the right to request the convocation of a temporary general meeting of shareholders as part of the right of minority shareholders. Since a shareholder who refuses to make the proposal does not necessarily have to undergo the procedure for remedy, a shareholder who refuses to request the convocation of a temporary general meeting of shareholders does not request the convocation of a temporary general meeting of shareholders. Thus, the shareholder who refuses to make the proposal cannot be seen as avoiding the legal remedy procedure by filing an application for a provisional disposition which puts the rejected proposal into

(2) On the other hand, the respondent argues that the board of directors should not accept the shareholder proposal because the shareholder proposal has been exercised, but can refuse the proposal if there are grounds for refusal of proposal under Article 191-14 of the Securities and Exchange Act, and Article 84-21 (3) of the Enforcement Decree of the Securities and Exchange Act. The applicant's shareholder proposal is responsible for causing poor management and the representative director before the Respondent is excluded from the management of the Respondent requests the re-participation of management. Such proposal is rejected as it is highly likely to infringe the company's development and the rights and interests of the shareholders. Thus, the rejection of the shareholder proposal in this case is justified

However, according to the provisions of Article 191-14 (3) and each subparagraph of Article 84-21 (3) of the Securities and Exchange Act, the board of directors shall make the proposal (Article 84-21 (3) 2 of the Securities and Exchange Act),

However, the above reasons for refusal of the proposal have been established as an exceptional provision to prevent the apparent abuse of the shareholder proposal right, so long as the risk of abuse is not clear, the reasons should be strictly interpreted for the wide wide realization of the shareholder proposal right by minority shareholders, and in particular, more strict interpretation is required to prevent the abuse of the board of directors' discretion with respect to the "matters which are not profitable or inappropriate to be presented as the agenda of the general meeting of shareholders" which can be called an abstract general provision.

The term "matters which are not profitable or inappropriate to be presented as the subject matter of the general meeting of shareholders" means matters which have already been realized of benefits or have no relation with the company's interests, matters which have no business relation, or matters inappropriate to the nature of the stock company, etc., and thus are inappropriate to become the subject matter of the general meeting of shareholders by formal judgment. The subject matter of this case, the appointment of directors or auditors, as its own, cannot be said to be of no practical benefit or inappropriate to be subject matter of the resolution of the general meeting of shareholders (Articles 382(1) and 409 of the Commercial

In addition, the above reasons are not included in the grounds for refusal of shareholders' proposal under the Securities and Exchange Act even if the (standing) representative director, who is subject to the appointment of the (standing director) director of the agenda of this case as alleged by the respondent, suffered losses due to poor management in the respondent company as well as the above reasons are not included in the grounds for refusal of shareholders' proposal under the Securities and Exchange Act. On the other hand, it is desirable for the respondent company to decide whether to participate

Therefore, the respondent's above assertion is rejected.

C. Determination on the necessity of preservation

Furthermore, while the respondent has no particular disadvantage by presenting the bill to the general meeting of shareholders, the respondent is at the risk of fundamentally preventing the exercise of shareholder rights by the applicants who are legally guaranteed by the refusal of the proposal, etc. of this case, ② it is not possible to take the procedure of requesting a temporary general meeting of shareholders, and ③ even though the respondent has already made the resolution of this case and completed the notice of convening a temporary general meeting of shareholders and the public notice thereon, it is reasonable to order the Respondent to hold a new provisional disposition as the subject matter of the general meeting of shareholders in consideration of the necessity of holding the provisional disposition of this case by February 28, 2007, which is 14 days before the general meeting of shareholders of this case (the Respondent was 14 days before the general meeting of shareholders of this case. However, if the last day of the period falls on a legal holiday, the period is the next day, and it is reasonable to acknowledge the necessity of holding the provisional disposition of this case as the subject matter of the general meeting of shareholders, and the necessity of holding the provisional disposition of this case.

3. Conclusion

Therefore, the application of this case shall be accepted as it is decided as per the disposition, because there is a vindication on the right to be preserved and the necessity of preservation.

[Attachment 1, 2]: Omitted.

Judges Kim Young-chul (Presiding Judge)