[1] The validity of issuance of new shares in a case where the representative director of a company issues new shares without a resolution of the board of directors or by a defective resolution of the board of directors (effective)

[2] Whether it is permissible to add a new ground for invalidation after the period of release of a lawsuit over the invalidation of issuance of new stocks expires (negative)

[1] Articles 390, 416, and 429 of the Commercial Act / [2] Article 429 of the Commercial Act

[2] Supreme Court Decision 2000Da37326 decided Jun. 25, 2004 (Gong2004Ha, 1207)

Plaintiff 1

Plaintiff 2 (Attorney Civil Semesters, Counsel for the plaintiff-appellant)

Defendant corporation

Daejeon High Court Decision 2004Na4841, 4858 Decided November 18, 2005

All appeals are dismissed. The costs of appeal are assessed against each party.

We examine the grounds of appeal.

1. Determination on the grounds of appeal by the Plaintiff (Counterclaim Defendant, hereinafter “Plaintiff”) 1

A. The issuance of new shares by a stock company is equivalent to the business execution of a stock company, so long as the representative director issues new shares in accordance with his authority, the issuance of new shares is valid. Even if there is no resolution of the board of directors on the issuance of new shares or the resolution of the board of directors is defective, the effect of the issuance of new shares merely is not affected by the internal decision-making of the company. Although the reasoning of the court below is not appropriate, the court below's decision that even if the defendant (Counterclaim Plaintiff; hereinafter "the defendant") made a resolution on the issuance of new shares by holding a board of directors without giving a notice of the board of directors' convocation to the auditor and the plaintiffs who are directors, it cannot be denied the effect of the issuance of new shares by holding a board of directors on February 28, 2001 is just and there is no violation

Although Plaintiff 1 asserts that the above issuance of new shares violates the principle of equity of shares and thus becomes null and void, it is not allowed to make an additional assertion of the ground for nullification of the issuance of new shares as mentioned above after the lapse of the period of release of the lawsuit filed in the final appeal (see Supreme Court Decision 2000Da37326, Jun. 25, 2004).

B. Examining the reasoning of the judgment below in light of the records, it is just that the court below rejected the plaintiff 1's claim for nullification of dismissal and the claim for the amount equivalent to wages during the period of dismissal on the premise that the defendant company's dismissal of the plaintiff 1 has no justifiable grounds and there is no violation of the rules of evidence as alleged in the ground of appeal

C. Examining the reasoning of the judgment below in light of the records, the court below is just in finding that the plaintiff 1 embezzled 230,99,700 won of the defendant company's public funds and repaid 124,631,90 won among them, and there is no violation of the rules of evidence as alleged in the ground of appeal (Provided, That the court below acknowledged that the "21, 2000, Feb. 21, 2000" as "the 19, Nov. 19, 1999" and "the 10,000,000 won" as "the 19, Nov. 19, 1999" as "the 19, Feb. 21, 2000."

2. Judgment on the Defendant’s grounds of appeal

A. The court below held that the resolution of the above general meeting should be revoked on the ground that the convening procedure is in violation of the statutes or the articles of incorporation or is remarkably unfair in light of the circumstances stated in its holding, and held that the resolution of the above general meeting did not exist on the ground that the regular general meeting of March 24, 2001 and the regular general meeting of March 31, 2002 were prepared only as if the regular general meeting of shareholders was held on the above date, although there was no fact that the regular general meeting of March 31, 202 had been held, the above general meeting of shareholders did not have any resolution of each general meeting of March 3, 201. There is no violation of the rules of evidence

B. As seen above, the court below is just in finding that the Defendant Company’s public funds embezzled by Plaintiff 1 repaid KRW 124,631,90 among the public funds of the Defendant Company, and there is no violation of the rules of evidence as otherwise alleged in the ground of appeal.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)