[1] Whether a crime of occupational breach of trust is established where a director of a stock company issues convertible bonds with an amount significantly lower than the appropriate price and accepts them to the principal or a third party (affirmative)

[2] The case holding that it constitutes an occupational breach of trust where a resolution of the board of directors, which decided to issue convertible bonds by the method of stock allocation by the representative director and directors of the company, was based on the invalid resolution even though it was invalid because the resolution was insufficient to the quorum, and thus, allocating forfeited convertible bonds to a third party by the new resolution of the board

[3] Method of assessing the market price or actual value of unlisted stocks

[1] When a director of a stock company issues convertible bonds, he/she shall comply with the relevant Acts and subordinate statutes and the articles of incorporation as a good manager (Article 382(2) of the Commercial Act and Article 681 of the Civil Act). Thus, in determining the conversion price, the reasonable price shall be determined by taking the most important standard for the price of stocks at the time of the issuance of the bonds and reflecting the interest rate of the bonds and the period of the request for conversion. When issuing convertible bonds at a remarkably lower price than the reasonable price at the time of the issuance of the bonds and acquiring them by a principal or a third party, a breach

[2] The case holding that a resolution of the board of directors which decided to issue convertible bonds by the method of stock allocation by the representative director and directors of the company falls short of the quorum and thus allocating forfeited convertible bonds to a third party by a new resolution of the board of directors through a new resolution of the board of directors, even though it becomes null and void, constitutes an occupational breach of trust

[3] The market price or actual value of unlisted stocks shall be appraised at the market price when there is a normal example of transactions that properly reflects the objective exchange value. However, if there is no such transaction example, a number of generally recognized methods of evaluation shall be considered. However, the relevant laws and regulations governing such method of evaluation shall not be readily concluded that any one method of evaluation shall be applied at all times in light of the application of different standards according to their purpose of enactment. It shall be reasonably determined by comprehensively taking into account the pertinent unlisted corporation and the parties to the transaction, the situation of the pertinent trading company and the relevant type of business, and the characteristics of the pertinent type

[1] Articles 355(2) and 356 of the Criminal Act, Article 382(2) of the Commercial Act, Article 681 of the Civil Act / [2] Articles 355(2) and 356 of the Criminal Act / [3] Articles 355(2) and 356 of the Criminal Act, Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

[1] Supreme Court Decision 2001Do3191 Decided September 28, 2001 (Gong2001Ha, 2403) Supreme Court Decision 2003Do5309 Decided May 27, 2005 / [3] Supreme Court Decision 2005Do856 Decided April 29, 2005 (Gong2005Sang, 902)

Defendant 1 and one other

Defendants and Prosecutor

Gangwon-do et al.

Attorneys Shin Jae-sil et al.

Seoul Central District Court Decision 2003Gohap1300 Decided October 4, 2005

The judgment of the court below is reversed.

Defendants shall be punished by imprisonment for three years and by fine for three thousand won.

In the event that the Defendants did not pay each of the above fines, the Defendants shall be confined to the Labor House for the period calculated by converting the amount of KRW 3,000,000 into one day.

However, the execution of each of the above imprisonment is suspended for five years from the date this judgment became final and conclusive.

1. Case overview

As to the facts charged of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation), the court below found that the defendants obtained property benefits from the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of victims' victims of the victims of the victims of the victims of the victims' victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims of the victims

2. Facts charged;

Defendant 1 worked as the representative director of the central development corporation established for the purpose of the business of using facilities for tourists from September 1993 to June 2002 (hereinafter “Baland”), who was engaged in the overall management of the management of the Burland, and Defendant 2 served as the representative director of the Burland from November 1993 to the establishment and execution of the financing plan of the Burland, and worked as the representative director of the management support office of the Burland from around February 1997 and from January 2001 to the date of June 6, 2002, and was working as the representative director from June 1, 2002;

From January 1, 1996 to consider profits received by the Government from trading with a person with a special relationship, not through a normal transaction, such as an irregular donation using convertible bonds, which are new financial instruments, as a donation, and to newly establish a taxation system for such donation, the amendment of the former Inheritance Tax Act (amended to the Inheritance Tax and Gift Tax Act, Jan. 1, 1997), while holding a public hearing on Jun. 1, 1996, and pre-announcement of legislation around Aug. 2, 1996, notified the National Assembly of the fact that it submitted the amendment to the National Assembly on Oct. 2, 1996. As such, prior to the amendment and effectiveness of the above Act, the total amount of assets at the time using the method of issuing convertible bonds is above KRW 80 billion,000,000,000,0000,000 won with a long-term plan for fostering a global framework, which is less than KRW 58 million,360,000,00 won in Samsung Group (the amount of capital is less than KRW 363.).

On October 196, 1996, "If corporate shareholders and individual shareholders in Ireland intentionally waive their subscription rights to convertible bonds to acquire them in order to exercise the controlling rights in Ireland, etc., or most corporate shareholders and individual shareholders refuse to acquire convertible bonds due to special circumstances, etc., they shall allocate forfeited convertible bonds to victims, etc. who are third parties, and transfer the right to control over Ireland to victims, etc." In such a case, the Defendants, the representative director of the Stland or directors, who are directors, have gone through legitimate procedures, such as the board of directors resolution, and if there is an example of trading the shares in Ireland before, the transaction price shall be decided by the board of directors; if there is an example of evaluation of the value of Grandland stocks; what is the basis for such evaluation; if there is an evaluation of the value of such stocks; and if there is an evaluation of the value of the stocks to acquire them to the maximum extent possible; and if there is an objective evaluation of the value of the stocks to obtain them, the appraisal corporation and other institutions, including specialized appraisal institutions, shall comprehensively request them to acquire and assess the value of the stocks, etc.

1996. 10. 30. 용인시 포곡면 전대리 310에 있는 에버랜드의 회의실에서 전환사채 발행을 위한 이사회 결의를 함에 있어, 상법 및 에버랜드의 정관에 의하여 재적이사 과반수의 출석과 출석이사의 과반수로 이사회 결의를 하여야 하고 그 규정에 위반한 결의는 무효임에도 17명의 이사 중 과반수에 미달하는 8명만이 참석한 상태에서, 위 이사회 개최 당시까지 에버랜드의 법인주주인 한솔제지 주식회사 등이 에버랜드의 주식을 1주당 85,000원 내지 89,290원에 매도한 거래실례가 있었으며, 에버랜드의 법인주주인 제일제당 주식회사 등이 에버랜드의 1주당 가치를 최저 125,000원부터 최고 234,985원까지 평가한 전례가 있었을 뿐만 아니라, 그 당시 상속세법상 보충적 평가방법에 의하더라도 에버랜드 주식의 1주당 가치는 127,755원으로 산정되는 상황이었음에도 불구하고, 위와 같은 상황을 전혀 검토ㆍ고려하지 않음은 물론 적정 전환가격 산정을 위한 그 어떠한 평가절차도 거치지 아니한 채 에버랜드 주식의 거래실례가액으로서 최소한의 1주당 실질 주식가치인 85,000원보다 현저하게 낮은 가액인 7,700원으로 전환가액을 임의로 정하고, “표면이율: 연 1%, 만기보장수익률: 연 5%, 전환청구기간: 사채발행일 익일부터”로 발행조건을 정함으로써 실질적으로 주식과 다름이 없는 성격의 전환사채 99억 5,459만 원 상당을 주주배정의 방식으로 발행하되 실권시 이사회 결의에 의하여 제3자 배정 방식으로 발행할 것을 결의하고, 이어서 공소외 4 등 일부 주주에 대하여는 전환사채 배정기준일 통지 및 실권예고부 최고도 하지 아니하고, 나머지 주주에 대하여도 1996. 11. 17. 또는 같은 달 18.경에 전환사채 배정기준일 통지서 및 실권예고부 최고서를 발송하였음에도 마치 1996. 10. 30.에 전환사채 배정기준일 통지서를, 1996. 11. 15.에 실권예고부 최고서를 각 발송한 것처럼 날짜를 소급하여 전환사채 배정기준일 통지 및 실권예고부 최고를 한 다음, 위 실권예고부 최고시 “청약기일인 1996. 12. 3.까지 위 전환사채에 대한 청약을 하지 아니하면 그 인수권을 잃는다.”는 뜻을 통지하였으므로 그 날까지는 그 주주들에 대하여 청약의 기회를 주고 그 날이 경과한 후 실권 전환사채를 제3자에게 배정하여야 함에도 1996. 12. 3. 16:00경까지 제일제당 주식회사를 제외한 주식회사 중앙일보사 등의 법인주주들 및 이건희 등 개인주주들이 각 주식보유 비율에 따라 배정된 전환사채의 청약을 하지 않자, 전환사채 청약기일이 경과하기 전인 1996. 12. 3. 16:00경 위 회의실에서 위 실권 전환사채 배정을 위한 이사회를 개최하여, 적정 전환가액 산정을 위한 아무런 평가절차도 거치지 않음은 물론, 실권전환사채를 인수함으로써 에버랜드의 지배권을 확보하게 되는 이재용 등과의 사이에 “에버랜드의 지배권을 획득함으로써 얻게 되는 프리미엄에 상응한 전환가격 및 그에 기초한 전환사채 발행총액”을 결정하기 위한 아무런 흥정과정도 거치지 아니한 채, 위와 같이 의결정족수 미달로 무효인 1996. 10. 30.의 이사회 결의로 정한 발행조건과 동일하게, 에버랜드의 1주당 최소한의 실질주식가치인 85,000원보다 현저하게 낮은 가액인 7,700원으로 전환가액을 임의로 정하고, “표면이율: 연 1%, 만기보장수익률: 연 5%, 전환청구기간: 사채발행일 익일부터”로 발행조건을 정함으로써 실질적으로 주식과 다름이 없는 성격의 위 실권전환사채 합계 96억 6,181만 원 상당 중 48억 3,091만 원 상당을 이재용에게, 각 16억 1,030만 원 상당을 공소외 1, 2, 3에게 각 배정한다는 내용의 결의를 함으로써, 결국 이재용은 주주에 대한 전환사채 발행절차가 진행 중이던 1996. 11. 13.부터 같은 달 19.까지 사이에 자신이 보유하고 있던 주식회사 에스원의 주식을 매도하여 미리 준비하고 있던 자금으로 1996. 12. 3. 자신에게 배정된 실권 전환사채 인수대금 전액을 납입하고, 공소외 1, 2, 3은 1996. 12. 3. 이건희로부터 증여받은 자금으로 같은 날 자신들에게 배정된 실권 전환사채 인수대금전액을 납입한 후, 이재용 등이 1996. 12. 17. 그 전환사채를 1주당 7,700원의 전환가격에 주식으로 각 전환하여 에버랜드 주식의 약 64%에 해당하는 합계 1,254,777주(이재용: 627,390주, 공소외 1, 2, 3: 각 209,129주)를 취득하게 함으로써 이재용 등으로 하여금 최소한 969억 94,262,100원{(에버랜드 주식의 거래실례가격으로서 최소한의 1주당 가액인 85,000원 - 전환가격인 7,700원) × 이재용 등이 취득한 주식 합계 1,254,777주} 상당의 재산상 이익을 취득하게 하고, 에버랜드에 같은 금액 상당의 재산상 손해를 가하였다.

3. The judgment of the court below

A. The lower court acknowledged the facts constituting the crime in its holding based on the evidence produced at the time, as follows:

(1) To the extent that there is no evidence supporting the facts charged of the instant case or it is somewhat inappropriate to do so, (1) to change the actual value of the shares to the shareholders of Ireland 1 at least 7 per annum for the issuance of new and outstanding convertible bonds, and to change the value of the shares to the shareholders of Ireland 1 at least 90 per annum for the issuance of new and outstanding convertible bonds at least 10 per annum for the issuance of new and outstanding convertible bonds, and (2) to change the forfeited value of the new and outstanding convertible bonds at least 9 per annum on August 2, 1996, the board of directors shall adopt a public hearing prior notice prior to the issuance of the new and outstanding shares at least 9 per annum for the issuance of new and outstanding convertible bonds by regarding the difference between 196 and 10 per annum 1; and (3) to change the forfeited value of the new and outstanding convertible bonds at least 9 per annum 30 per annum ;

(2) Recognizing the remainder of the facts charged as factually, the lower court found the Defendants guilty of occupational breach of trust within the same scope of the same facts charged.

B. The court below ruled in the non-guilty part that "it is difficult to conclude that the conversion price of the convertible bonds of this case was remarkably low compared to the appropriate price of Ireland at the time of the issuance of the convertible bonds of this case, but the evidence submitted by the prosecutor alone alone is at least 85,00 won at the time of the issuance of the convertible bonds of this case, and it is difficult to find specific cases of normal transaction at least 85,00 won at the time of the issuance of the convertible bonds of this case or reasonable methods of appraisal of the market price, and therefore, the crime of breach of trust by the issuance of the convertible bonds of this case can be recognized property loss. However, since the issuance of the convertible bonds of this case cannot be calculated specifically by the value of property gains acquired by transfer, it cannot be determined by the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) which shall be punished by adding the value of property gains, and thus, it shall not be acquitted in the disposition of this case

4. Summary of grounds for appeal;

A. Defendants

(1) misunderstanding of facts or misapprehension of legal principles

Although the facts charged in this case are acquitted as follows, the court below found the guilty of the crime of occupational breach of trust within the scope of the facts charged in this case. The court below erred by misapprehending the facts or by misapprehending the legal principles due to violation of the rules of evidence or incomplete hearing, which affected the conclusion

(A) As to the basic problems of the lower judgment

The court below acknowledged or judged the facts in violation of evidence or legal principles without any evidence, and rejected the main part of the facts charged, but in the judgment, it concluded that the defendants, who did not explicitly indicate the facts charged as the grounds for prosecution in accordance with the above fact-finding, issued the convertible bonds of this case to a third party under the prior plan to transfer the control right of Inland to Lee Jae-in, etc., and that this is the premise of any other judgment. Accordingly, the judgment of the court below did not err in the determination of various legal and factual arguments of the defendants and the defense counsel, or did not examine other circumstances directly because they were assigned to a third party according to the prior plan.

(B) As to the issuance of the instant convertible bonds under the plan by which the Defendants intended to obtain control over Ireland by transfer, etc.

Upon examining the evidence presented by the court below, there is no evidence to support it, and there is no reason to presume it. In addition, in order for the Defendants to either implement such plan or plan, shareholders who have the preferential right to underwrite convertible bonds should lose their rights. Therefore, prior to the issuance of convertible bonds, shareholders should either publicly recruited with shareholders or forfeited from shareholders, or shareholders should have forfeited their rights so that re-issuance, etc. can be shared even after the resolution for issuance of convertible bonds was passed at least after the resolution for issuance of convertible bonds. Rather, the court below did not indicate that there is no validity of the reason for the forfeited rights of shareholders, but did not indicate that the Defendants either publicly offered for the forfeited rights of shareholders or agreed for the forfeited rights of shareholders, or that there was no agreement between them.

Therefore, the court below erred by finding facts against logical rules or empirical rules without evidence.

(C) As to the issuance of the instant convertible bonds by the third party allotment method

The legal principles established in the Commercial Act to classify the method of allocating convertible bonds into the preferential allotment method of shareholders and the third party on the basis that the opportunity to preferentially acquire the convertible bonds is given to each of the shareholders and the third party. As such, circumstances such as the intent of directors at the time of issuance of the convertible bonds, the intent of shareholders to acquire the convertible bonds, and the necessity to issue the convertible bonds cannot be considered in determining the method of allocating the convertible bonds, and there is no example or opinion to classify the method as shown in the original judgment.

However, shareholders of Ireland not only provided the opportunity to preferentially acquire the instant convertible bonds, but also the procedures for issuance, such as the board of directors, the date of notice of allocation, and the peremptory notice of forfeited stocks, were conducted in accordance with the shareholders' preferential allocation method. In fact, the Japanese party acquired convertible bonds allocated according to the share holding ratio, and the shareholders' preferential acceptance right was not obstructed or excluded. Thus, the instant convertible bonds were issued by the shareholders preferential allocation method.

As long as the Defendants and the shareholders agreed to the forfeited rights in advance, or the Defendants were not aware of the fact that the Defendants and the shareholders agreed to the forfeited rights, the issuance of the convertible bonds is different from the assumed cases, and thus, it is merely a non-founded basis, inasmuch as the issuance of the convertible bonds is different from the assumed cases, since the issuance of the convertible bonds in question is different from the assumed cases.

Therefore, the judgment of the court below is erroneous in the misapprehension of legal principles or lack of reason as to allocation method of convertible bonds.

(D) As to the fact that the Defendants issued convertible bonds for the purpose of transferring the control right of the Ireland to Lee Jae-in, etc. without the necessity of financing, and that there is no validity of the grounds for the forfeited rights of shareholders

(1) As to the defendants issued convertible bonds with the purpose of transferring control over ABland to foreign victims, etc. without any need to raise funds.

Recognizing the facts and circumstances on which the judgment was based in determining the Defendants and their defense counsel’ assertion, the lower court determined that the instant convertible bonds were issued in order to transfer the control right of the Ireland to Lee Jae-in, etc. although there was no need to raise funds from the beginning.

However, at the time of the issuance of convertible bonds in this case, Sberland has significantly aggravated the financial structure of the short-term loans to be repaid within 526% and 70% of the total amount of the loans. In addition, it was necessary to raise funds of KRW 200 billion in 1997. In addition, since Sberland was considerably small in size of capital compared to assets, it was also necessary to expand it at a certain level within the early time in order to increase the size of borrowed funds or corporate bonds issued in the future. In this situation, the defendants examined the methods of long-term and long-term loans, capital increase, and issuance of convertible bonds based on the market outlook and the mid-term interest rate and future financing market outlook, as well as the borrowing of loans from financial institutions, it was difficult for the defendants to increase the financial structure as well as the financial structure more worse, and it was difficult for the general company to receive allocation of the amount of new bonds issued by the C&C, and there was no possibility that the new bonds were issued in advance and the new bonds were issued.

In addition, at the time of the issuance of the above golf course, it was only one of the golf courses held by Ireland, and it was impossible to sell membership rights for the above golf course after the completion of sale in lots. In addition, under the circumstance that the leisure industry is extreme due to the subsidence of the entire economy facing the IMF situation, as seen earlier, it was difficult to expect prompt sale in lots except some affiliate companies such as Samsung C&T or Il-il, etc. It was difficult for financial institutions to raise its long-term loans as above. From October 196 to November 1, 196, it was difficult to obtain a long-term loan of KRW 3.7 billion from Samsung Bio Bio, which is an affiliate company, and it was merely possible for Samsung Bio Bio Life to obtain a stable loan from the above financial institution, which is more likely to have been subject to regulation on affiliate companies and the same person's loans, but it was also difficult to obtain a quarterly-term and low-term financing plan, which is more likely to be used as a means to improve the capital demand of the above company, and thus, it is also difficult's anticipated and difficult-term financing units.

In addition, the evidence presented by the court below does not appear to have any circumstance to see that, at the time of issuance of the instant convertible bonds, Ireland did not need financing or that other financing methods are more favorable than the issuance of the instant convertible bonds.

② As to the fact that the grounds for forfeited rights of shareholders are unreasonable

At the time of the issuance of the convertible bonds of this case, Burland is an enterprise managing and operating one of the VeneF golf courses located in Ansan-si with no profitability. It was not only an affiliate company that can be evaluated as a holding company, such as Samsung Bio-resources, but also an affiliated company that has been showing deficit for several years. The ratio of debt of Burland, average sales profit compared to financial costs according to the size of loan, profits and losses, and future business prospects (the economy of the leisure industry becomes extremely worse before the IMF situation), the interest rate of the convertible bonds of this case at the time is about 12% per annum, and 5% per annum at the maturity, etc. The judgment of the court below is unreasonable since Burland and the instant convertible bonds were not only for the reason that the investment value was high, but also for the reason that there was no possibility of forfeiture of the company's new assets or investment profits, but also for the reason that there was no possibility of forfeiture of the company's new assets.

Furthermore, the lower court did not have any decision on whether there is no validity of the grounds for forfeiture of rights, on the other hand, whether corporate shareholders intended to have the right to control over Abberland transferred to victims, etc., whether there was mutual agreement between corporate shareholders, and whether there was a contact between corporate shareholders and the Defendants.

(3) Therefore, the court below erred by finding facts against the evidence or incomplete hearing or incomplete hearing.

(E) As to the fact that there is a duty to determine the conversion price of convertible bonds to correspond to the actual value of shares

The instant convertible bonds are issued by giving shareholders the preferential subscription right, and in this case, there is no limit to the conversion price, and there is also a common and practical practice, and there is also a regulation of the law, so the Defendants cannot be said to have such duty.

As a result, even if the convertible bonds of this case were issued by the third party for the purpose of transferring control, the concept of control shall be understood as a kind of property right held by the shareholders against the company that is the object of ownership, and as it is not the right of the company to the company itself, the director of the company is obligated to determine the conversion price by comprehensively taking into account all the factors, such as the urgency of the procurement of equity capital due to the request for conversion, the adequate size of the procurement of equity capital, the intent of the shareholder's acquisition, the trend of the market, and the trend of the share price, etc., without relating to the market price of the shares, in determining the conversion price. However, in the case of the third party allocation, unlike the allocation of shares, the preferential acquisition right is granted to the third party and the new shares are issued by the third party upon the request for conversion of the convertible bonds, and in particular, if the conversion price is lower than the market price of shares, the value of the shares held by the existing shareholders falls, thereby protecting the existing shareholders in the way of restricting the director's right to issue.

In addition, even if the judgment of the court below is based on this part of the judgment, it cannot be different in determining the conversion price by what is the purpose of acquiring the subscription price of the B/L, and further, the purpose of acceptance is merely the intent of the underwriter of the convertible bonds, and it does not need to be known to the issuer as the issuer, and it is impossible for the issuer to determine the conversion price according to the purpose of acquisition because the underwriter is not finally determined at the time of determining the conversion price. Thus, this part of the judgment of the court below is no reasonable ground for its determination.

Furthermore, such determination by the court below is basically caused by confusion between a purchase price decision in cases of purchasing stocks (asset transaction) and a acquisition price in cases of acquiring convertible bonds (capital transaction). In assets transaction, such as stock transaction, such as stock transaction, the transaction price of stocks is bound to be determined according to the actual value of stocks because of the transaction with stocks as the object of sale and purchase, but in cases where the same is the capital transaction with which new stocks or convertible bonds are underwritten from a company, the actual value of stocks should not be reflected as it is because the conversion price of new stocks or convertible bonds is basically the nature of investment in the company, and there is a difference between the asset transaction and the capital transaction in nature, and there is a legal, accounting and financial distinction.

Therefore, the judgment of the court below that the conversion price of convertible bonds shall be based on the actual value of stocks is contrary to the legal principles of discipline, practical practice, and theory, and the judgment below is erroneous in the misapprehension of legal principles.

(F) As to the issuance of the instant convertible bonds against the principle of capital adequacy and constitutes an remarkably unfair issuance

① The lower court held that the Defendants had occupational duties to handle the affairs for the interest of the Ireland, including the duty to make the best possible funds to be paid in the Republic of Korea and to make the company’s capital adequacy available to the Defendants in connection with criminal facts.

However, the principle of capital adequacy under the Commercial Act refers to the principle that a company shall substantially hold net assets equivalent to capital and that where stocks or other securities are issued, investments equivalent to capital must be fulfilled. In cases of issuing convertible bonds or new stocks, at least the amount registered as capital, i.e., the conversion price or issue price at least a par value, i.e., the total amount of convertible bonds or stocks issued, i.e., the total amount of convertible bonds or stocks issued, i.e., the total amount of paid-in capital, i., the total amount of paid-in capital, and if assets are reserved in the company, the company will perform its duties. Furthermore, there is no duty to require the company to withhold cash

② The lower court held that “If the principal purpose of the issuance of convertible bonds is not to raise funds, but to transfer control over the company on condition that it is favorable for a specific person, it constitutes an abuse of the company’s management’s right to issue convertible bonds (limited to substantially unfair issuance pursuant to Article 424 of the Commercial Act, applicable mutatis mutandis under Article 516(1) of the Commercial Act).” The lower court held that “the issuance of convertible bonds of this case lacks substantial justification in allocating convertible bonds to a third person.”

However, Article 424 of the Commercial Act clearly unfair issuance is a requirement for a claim to maintain the issuance of new shares (which is applicable mutatis mutandis to convertible bonds, Article 516 of the Commercial Act). The right to maintain the issuance of new shares is a shareholder’s right that can be claimed against the “company” to maintain the issuance of new shares, and is a right that is recognized to protect the interests of shareholders who may suffer losses, and the requirement is that shareholders may suffer disadvantages.

Therefore, in order for the issuance of the instant convertible bonds to constitute an remarkably unfair issuance due to the lack of substantial justification, there should be any disadvantage or loss to the “individual”, and the instant convertible bonds not only were treated equally to all the existing shareholders, but also in relation to re-use, etc. to which forfeited convertible bonds have been allocated, so it cannot be deemed to be remarkably unfair issuance at the beginning, since the right of preferential subscription is guaranteed to the existing shareholders, and the lower court is deemed to be an remarkably unfair issuance under Article 424 of the Commercial Act, and thus, under the premise that the disadvantage or loss was incurred to the company and its shareholders, even according to the judgment of the lower court itself, there is no room for establishing a crime of occupational breach of trust, which constitutes the elements of the company.

According to theories or judicial precedents, where a director unfairly distributes a large number of shares to a specific person who is so so so so as to maintain his/her own status, where the director abuses the issuance of new shares by means of controlling a small number of shareholders, where he/she allocates new shares to a specific shareholder first or excessively in order to strengthen or reverse the equity structure of a specific shareholder in a dispute over management rights, where there is discrimination between subscribers to pay subscription deposits, where new shares are issued intentionally at a high level to induce large number of forfeited shares, such as where new shares are issued by excessive evaluation of a specific person's investment in kind, and thereby giving unfavorable results to one shareholder are limited to cases where new shares are issued by one shareholder.

However, the convertible bonds of this case are not issued as a third party allocation, and it is in itself to demand substantial justification due to third party allocation, not as a damage to the company, but as a result to prevent the loss or disadvantage of shareholders. Therefore, there is no room for the issue of substantial justification of issuance or allocation in the establishment of a crime of occupational breach of trust under the Criminal Act premised on the occurrence of company damage.

(g) As to the act of breach of duty in the issuance procedure of convertible bonds

(1) As to the issuance of convertible bonds by a invalid resolution of board of directors

At the time of the resolution of the board of directors on October 30, 1996 on the issuance of the convertible bonds of this case, Non-Indicted 17 was not allowed to attend due to a foreign business trip. However, since the foreign business trip listens to the process of reporting business through telephone conversations before the opening of the board of directors, the above resolution of the board of directors is valid by a written resolution, or the resolution of the board of directors for allocating forfeited convertible bonds of this case is valid by directly attending the resolution of the board of directors for allocating forfeited convertible bonds of this case, and on the premise that the resolution of the board of directors is valid by the resolution of the board of directors on the issuance of forfeited convertible bonds of this case, the resolution of allocating forfeited convertible bonds of this case was cured by ratification, unless

Even if convertible bonds were issued by a resolution of the board of directors with defects, the issuance of convertible bonds does not become null and void, and the resolution of the board of directors is not formally adopted, as the court below also recognized, all directors in Ireland at the time and now did not raise any objection against the issuance of the instant convertible bonds. As long as the Defendants did not deviate from the resolution of the board of directors to prevent the dissenting opinion of the board of directors, this is merely a negligence attributable to the Defendants’ failure to perform their duties.

Furthermore, there is no causal relationship with the decision of conversion price at issue in this case.

(2) As to the fact that the transaction room for the determination of conversion price was not examined or that it did not undergo the assessment procedure

Since the conversion price of the instant convertible bonds issued by the shareholder preferential allocation method is not necessarily determined based on the actual value of stocks, the Defendants are not obligated to do so.

Even if not, the Defendants, at the time of issuing the convertible bonds and determining the conversion price of the instant convertible bonds by sufficiently examining the actual examples of the issuance and conversion price determination of the instant convertible bonds by domestic companies. In the event that the company issues the convertible bonds, there is no statutory basis under which the company’s determination of the conversion price of the instant convertible bonds regardless of listed company or unlisted company, public offering, private placement, etc. should be conducted by an external assessment agency, such as an accounting corporation, in determining the conversion price of the instant convertible bonds. Moreover, as at the time of issuing the instant convertible bonds, almost all domestic companies in Korea have issued the convertible bonds with the conversion price of the stocks at the face value of the stocks, the Defendants cannot be subject to the duty under the good faith principle that they should undergo the evaluation by the external assessment agency

(h) As to the appropriateness of the conversion price

(1) In calculating the real value of the stocks of Ireland, the method of assessment based on the net asset price shall not be appropriate.

Of the grounds indicated by the court below, it seems that the method of appraisal according to net asset price can be the standard for calculating the actual value of the stocks of the Corporation. Among the reasons for determining that it is difficult to select a similar company that is deemed appropriate as the comparison with the Corporation, the issue may always arise in the appraisal of the stocks of the unlisted company. It is not an active reason to adopt the method of appraisal according to net asset price among various methods of appraisal, but it is not an active reason to resolve sufficiently considering various factors of appraisal after selecting the company most adjacent to the comparison, and it is also an actual time of appraisal, and it is not an ordinary investor expected to acquire the control over the Corporation, so it is not an ordinary investor expected to acquire the stocks of the Corporation, and it is not a controlling shareholder at the time of the issuance of the bonds of this case, and it is not only a result of the acquisition of forfeited bonds and the conversion of stocks, but also a large number of shareholders at the time of the issuance of the bonds of this case to the extent that it is not possible to allocate the company's net asset value to the company.

In addition, even if the fact-finding results of the fact-finding conducted by the court below on the President of the Korea Accounting Institute, assets such as the Burland have many assets, but it is difficult to view that the value of net assets per share is reflected in the actual value of the stocks in the case of an enterprise showing the enemy for several years as well as no dividends

Furthermore, as at the time of issuance of the instant convertible bonds, the net asset value per share of Burland is KRW 223,659, which is an amount equal to twice as a supplementary evaluation method under the Inheritance Tax Act for Burland shares, which is an amount equal to 127,755 won, which is the value assessed by the supplementary evaluation method under the above Inheritance Tax Act. This is more so in light of the fact that the court below's determination of net asset value based on Burland's asset value without considering the income value at the time of issuance of the instant convertible bonds is unreasonable, and in particular, it is difficult for Burland to record the deficit of three consecutive years at the time of issuance of the instant convertible bonds and has deteriorated its financial structure.

Basicly, the net asset value assessment method is not only reflecting the company's profitability and business nature which have a greater influence on the share price at all, but also the court below recognized that there is a lack of evaluation in the dynamic aspect of the company or the share price, and it is merely merely a disposal value of the holding assets at the stage of liquidation, and it is not easy for the company to take it as a method of stock value assessment, and there is no problem that it is difficult for the company to take it as a method of stock value assessment in the academic and practical circles, and it is a situation that the valuation is based on the net asset value assessment method in the evaluation of the stock or corporate value.

② The grounds that the court below held that the conversion price of the convertible bonds of this case is a very low price are unfair in that they are as follows.

First, the court below reasoned that the conversion price of the convertible bonds of this case is considerably low compared to net asset value, but it cannot be deemed as reasonable as seen earlier. In light of the fact that the net asset value of the company, such as Burland, is appropriate for adopting it as a stock value assessment method. As the court below acknowledged, in the case of listed companies holding a large number of assets, such as Burland, the conversion price of the convertible bonds of this case cannot be determined at low price of 10%. In this regard, the court below determined that the conversion price of the convertible bonds of this case is considerably low in the net asset value of 7% per share, which is 10% of the net asset value per share before the issuance of the convertible bonds, and that the conversion price of the convertible bonds of this case is considerably low in the net asset value of 8% of the net asset value per share, which is 10% of the net asset value per share before the issuance of the convertible bonds, as the result of the above determination of the conversion price of 10% of the net asset value per share after the issuance price of this case.

Next, the court below held that the conversion price of the convertible bonds of this case was lower for the reason that it is difficult to deem that the price of the convertible bonds of this case was higher than 2 years since the price of the company's shares in the Republic of Korea and the price of the issuance of new shares at the time of the company's offering of new shares in Ireland was lower than 10,000 won per share, although considering that the price of the company's shares in the Republic of Korea and the price of the issuance of new shares at the time of the company's offering of new shares in the Republic of Korea was lower than 10,000 per share. However, the court below held that the sale price of the company in the Republic of Korea and the price of the new shares in Ireland was the purchaser and the company in the position of the party with whom the shares are issued, and that the price of the new shares in Ireland and the new shares in the Republic of Korea are the Samsung, with the aim of avoiding any disadvantage recognized as the tax based on the denial of unfair act and deemed donation under the Inheritance Act and unfair support under the Fair Trade Act.

③ As a result of an assessment of the value of the shares in Ireland by A.I.D. under the Act on Soverland Cash Flowing in this case, the value of the shares was assessed to KRW 5,446 on December 31, 1996 as of December 31, 1996, the value per common share in A.I.land was assessed to KRW 5,446, and the value per share of A.I.land was assessed to KRW 10,413, based on the ex post business performance based on the ex post facto business performance, and the above assessed value was verified to be adequate by A.I.D. accounting corporation.

In regard to this, the court below held that the future cash flow method is not only difficult to determine cash forecast flow or discount rate, which is a key element of the stock price calculation, but also that there is room for arbitrary involvement in the evaluation process, and that these circumstances were presented as a similar company at all different hotel line from the Burland in the evaluation process, which was arbitrarily applied the value of beta in the evaluation process, and that the above evaluation result was erroneous in applying the discount rate excessively.

However, as seen earlier, the future cash flow discount law is the most widely used analysis tool among the theory of financial management for valuation, which is most appropriate for assessing the future value of the company, and for this reason, it is widely recognized in the academic community that accurately reflects the real market value of the company compared to any one index in corporate value assessment, and is currently being used by accounting firms or credit rating agencies, and currently being used as the most widely used method in general transactions such as M&&A practice, and there may be somewhat different conclusions in the application system of assessment as an essential limitation in the evaluation method. However, it is not reasonable to conclude that the court below's arbitrary results may be involved in the evaluation method, but it is not so big that the difference in the evaluation method is inappropriate.

In addition, the above reasons presented by the court below, which determined that it cannot accept the evaluation results verified by the accounting firm, are circumstances where sufficient explanation has already been completed as a result of the prosecutor's investigation conducted several times against the certified public accountants belonging to the accounting firm having been in charge of the evaluation, and the certified public accountants belonging to the three-day accounting firm in charge of the verification, and the non-indicted 6 of the accounting firm in charge of the evaluation. The court below, although the prosecutor had been in the stage of investigation without any additional examination, it connects the questions that have

In assessing the corporate value of St. St. St. accounting corporation, rather than comparing the hotel credit as it is, rather than comparing the hotel credit with the hotel credit, the hotel credit was established as a large company, and the hotel credit was adjusted and assessed by reflecting the differences in the purpose, financial structure, asset composition, and profit structure of the hotel credit, and the factors indicating the reaction of changes in the stock return rate due to changes in the market profit rate. In applying beerer value or beta credit coefficient, which is a means of measuring the fluctuation in stock value as a result of measuring the fluctuation in stock value, it is not arbitrarily determined as recognized by the court below, and it is a general method of evaluation. In order to calculate the average interest rate, the court below determined that the average interest rate on the balance of the loan credit at the time of the issuance of the instant convertible bonds should be calculated by calculating the average interest rate of 18% as of the average interest rate of 18% as of the date of issuance of the instant bonds. However, the court below determined that the above average interest rate of 28% of the instant convertible bonds should not be calculated by the average interest rate of 198%.

④ Rather, at the time of the issuance of the instant convertible bonds, the financial structure of Ireland and its profits have deteriorated considerably. On December 196, 196, when the instant convertible bonds were issued, the price of the instant convertible bonds was extremely low compared to the market price of the instant bonds at the time of the issuance of the instant bonds - The price of the instant convertible bonds at the time of the issuance of the instant bonds at the time of the issuance of the instant bonds - The price of the instant convertible bonds at the time of the issuance of the instant bonds was extremely low compared to the market price of the instant bonds at the lowest point of time. The instant conversion price cannot be said to be lower than the market price of the instant bonds at the time of the issuance of the instant bonds at the time of the instant market price at the time of the issuance of the instant bonds - The net value of the instant bonds at the time of the issuance of the instant bonds at the time of the issuance of the instant bonds at the time of the issuance of the instant bonds at the time of the issuance of the instant bonds at the rate of 10,41366 won per share value per share.

Even if the market price of the shares in Korea and IBland exceeds 7,700 won per share, the conversion price per share is within the scope permitted under the Criminal Act, considering various circumstances, such as management status, financial structure, realization of shares or profitability at the time of issuance of the convertible bonds in this case, general practices of the issuance of domestic convertible bonds, the increase of 7,700 won per share from par value to 50% in determining the conversion price.

(i) As to the conversion price and the loss of the company

① The conversion price of the convertible bonds of this case does not cause damage to Ireland for a long time, and only the transfer of the parts between the shareholders of the Burland, is a problem.

However, as seen below, it is supported by the response and correlation between the old shareholders and the company according to the issuance of convertible bonds, and even in the financial and accounting aspect, it is irrelevant to the conversion price and the company's profit and loss. In particular, if convertible bonds are issued in the manner that the preferential subscription right is granted to the shareholders, the new shareholders are the same, so there is no problem of damage and profit between the new shareholders and the new shareholders due to the transfer of the division.

② Even if the collusion in collusion with Article 424-2 of the Commercial Act on the obligation to pay the difference in the acquisition, it is supported by the legal doctrine that the issue price of new shares or the conversion price of convertible bonds is irrelevant to the profits and losses of

According to the above provisions of the Commercial Code, a person who acquired new shares in collusion with a director is obliged to pay additional shares to the company, and a director who issued new shares at low price also is liable for damages to the company or shareholders. However, the above provision is a common view that a third party is applied to the acquisition of shares by a third party, not to the preemptive right, but to the acquisition of shares in a third party position, and that it does not apply to the issuance of new shares in accordance with the shareholder allocation method. Since profits equivalent to the difference between the issue price due to the acquisition at low price and the market price due to the dilution of the value of the existing shares are offset against losses caused by the dilution of the value of the existing shares, there is no concern that the existing shareholders will be damages due to the dilution of the existing shares, and even if he waives the subscription, this is because the shareholder is a result of the

(3) In capital transactions such as the issuance of new stocks, etc., the same concept as passive losses of the company shall not be recognized.

The concept of passive damage may be acknowledged in the transaction of assets involving the outflow of assets, such as the sale of assets, on the ground that the assets of the company were leaked for the price less than the assets of the company. However, without the disclosure of the company's assets at all, it is legally, fiscal, and financially unreasonable to take account of the passive damage with the excess of the funds introduced in the transaction of capital, such as issuance of new stocks, only from the standpoint of the company. Furthermore, in the case of capital transactions such as issuance of new stocks, the concept of passive damage is premised on the existence of "reasonable amount of benefits". In addition, in the case of capital transactions such as the issuance of new stocks, it is merely favorable to the company if an investment is made by a shareholder or a third party, and there is no problem that the rights of the existing shareholder (value of shares) should be protected in the relationship with the existing shareholders. However, in the case of the allocation of stocks by a third party, there is no passive difference between the issuance price of new stocks and the issuance price of new stocks, and in the case of the third party, there is no passive damage.

In other words, even if convertible bonds are issued at the conversion price below the actual value of the stocks, the amount of profit earned by a third party is not the difference between the actual value of the stocks and the conversion price. The amount of profit earned by an underwriter of convertible bonds is merely the difference between the actual value of the stocks and the conversion price, and the amount of profit is not only the difference between the amount of loss incurred to the existing stockholders, but also the difference between the amount of profit and the amount of loss incurred to the existing stockholders. If a new benefit was obtained through the issuance of the convertible bonds of this case, the amount of profit is 34,297,171,086.56 won per share, based on the conversion of the value of the stocks before and after the conversion into the stocks, and this is not consistent with the facts charged. It is not completely consistent with the amount of loss suffered by the existing stockholders of Ireland, 96, 94, 290, and 100 won per share.

④ Furthermore, if the issuance of convertible bonds by setting the conversion price at lower than the market price of the shares causes damages to the company, it should be deemed that the existing shareholders would naturally incur damages to the company even if they subscribed to the convertible bonds. Thus, even if the existing shareholders in Ireland subscribed to all of the instant convertible bonds, they should be able to ask the Defendants for the crime of occupational breach of trust. If the existing shareholders acquired the instant convertible bonds in this case, the prosecutor did not hold the Defendants liable for occupational breach of trust, and the facts charged also excludes the beneficiaries who acquired profits from the Defendants’ occupational breach of trust. Although the conversion price was set lower than the market price of the shares, there was no prosecution by the prosecution against the acquisition of the convertible bonds by the existing shareholders, and the issue of the low price of the convertible bonds was merely a problem since the existing shareholders allocated the convertible bonds to the transferred company, etc.

In addition, the property damage in breach of trust refers to the reduction of the overall value of the property of the principal, and the decrease of the profit that can be acquired in the future is included in the decrease of the value of the property, but whether the value of the property has been reduced or not shall not be judged formally from the legal point of view or from the legal point of view.

⑤ If the issuance of convertible bonds of this case constitutes an remarkably unfair issuance as decided by the court below, this provision is based on the reason that the company was not a company but a shareholder, as seen earlier, and the requirements for director’s claim for illegal act maintenance on the ground of loss of the company do not include any remarkably unfair issuance. Thus, it cannot be said that damage was caused to the company at the beginning.

(6) Therefore, even if convertible bonds were issued at the conversion price lower than the actual value of the stocks, there is no loss to the company, and this is supported by the provisions of the Commercial Act, the common theory, and the precedents. Therefore, the judgment of the court below which neglected this is erroneous in the misapprehension of legal principles.

(j) On the intent of breach of trust

In the case of occupational breach of trust, the “act of breach of trust” must be either intentional or intentional, and generally constitutes a crime of breach of trust in combination with the perception that a person who administers another’s business on duty would inflict loss on the principal and that the person himself/herself or a third party would have violated his/her duty to obtain economic benefits. In particular, in determining whether a corporate manager has an intention of breach of trust in relation to a corporate management judgment, “an act of breach of trust may be established even if a manager has made a careful decision with the belief that it is consistent with the interests of the enterprise on the basis of the information collected within the extent possible without the intent of the manager to take any personal benefits because it is intrinsicly dangerous in corporate management and without the intention of the manager to take any personal benefits, there may be cases where the prediction is still reached or the enterprise suffers loss. In such a case, if a person intends to impose criminal liability of occupational breach of trust by relaxing the interpretation standard of intent, this would violate the principle of no punishment without the law, and even in a policy perspective, it would be highly likely that the corporate manager has no economic interest or risk.

Therefore, even if there is no room to cause damage to the company as seen earlier, and even if the result of damage occurred, it is difficult to view that the Defendants were aware that the issuance of the instant convertible bonds would cause damage to ABland due to the occurrence of damage to the company, and further, considering the fact that the issue of the instant convertible bonds did not readily conclude that there was a legal expert as to whether the low price of the convertible bonds would cause damage to the company, even if the instant convertible bonds were issued at a price lower than the actual value of the shares, it is difficult to find that the Defendants, other than a legal expert, knew that the issuance of the instant convertible bonds would cause damage to ABland, or could have been aware that the Defendants

(k) As to the actual issuance of convertible bonds and the director’s occupational duty

The purpose of this case’s convertible bonds is not to have been planned in advance for the purpose of transferring control. However, since convertible bonds can be issued in various ways, even if convertible bonds were issued with the opportunity to transfer control, it is not reasonable to impose criminal liability on them, and to hold shareholders liable for the conversion price decision on the ground that the conversion price of convertible bonds, which the shareholders voluntarily waived to acquire, was lower than the conversion price, is the low price.

Since convertible bonds are bonds in essence, they are issued for the purpose of financing, however, from the standpoint of shareholders, such as the issuance of new shares, the transfer of control can be an opportunity for the transfer of control rights from the standpoint of shareholders. As such, the most general form of transfer of control rights by shareholders of the company is that the existing shareholders directly transfer the shares held by the existing shareholders to a third party. Although the existing shareholders would obtain the transfer of control rights through the transaction of assets such as ordinary transfer of shares, they do not bring any funds into the company. However, in the event of transfer of control rights through the issuance of convertible bonds or new shares, the company would be able to secure financing and expansion of capital through the transfer of control rights between new and old shareholders. Thus, the company would otherwise intervene in the process of transferring control rights between the shareholders, unless there is a dispute over management rights, and thus, the company itself should be evaluated positively in that it did not impose criminal liability on the directors executing the issuance of new shares or new shares, but rather, it would have promoted capital through the transfer and expansion of management rights between the shareholders.

Examining the specific form of new shares or convertible bonds issued upon the transfer of control, in a case where: (a) new shares or convertible bonds are issued by the method of a shareholder allocation and the existing shareholders who have acquired them transfer to a third party new shares or convertible bonds; (b) in a case where new shares or convertible bonds are issued by the method of a shareholder allocation; and (c) forfeited new shares or convertible bonds are cultivated to a third party by the waiver of subscription by the existing shareholders; and (d) in a case where a special resolution of the general meeting of shareholders is obtained, etc. by the existing shareholders,

Inasmuch as the control over a company is legally protected, and the transfer of control is a matter that belongs to the private area of a shareholder. Thus, barring actual damage to interested parties such as creditors, etc. of the company, the transfer of control over the company is limited to the method or process of the transfer of control that can be selected by the method of investing funds in the company instead of transferring the existing shares owned by the company, and its form is limited only to the form, and there is no difference in economic substance or legal effect such as the change of equity ratio due to the issuance of new shares or the change in the value of the existing shares, etc., and thus, the impact on the company, other shareholders, and creditors is identical. Thus, even if the new shares issued by the method of the allocation of new shares are transferred (Ⅱ), the transfer after the acquisition is made by forfeited the shares issued by the method of the allocation of shares, and the transfer of control belongs to the company as a result, it cannot be said that the transfer of control over the previous shares constitutes a loss to the company. Furthermore, even if the transfer price of the shares is determined by a special resolution of shareholders, it is reasonable even if the conversion price of the new shares (Ⅲ price).

(2) Unreasonable sentencing

The punishment sentenced by the court below to the defendants is too unreasonable.

(b) Swords;

(1) misunderstanding of facts or misapprehension of legal principles

Although the defendants suffered property benefits and losses due to the defendants' occupational breach of trust, even though it is not easy to calculate the value of property benefits, in this case, the value should be calculated as long as it is recognized to have been sufficiently possible in practice, and such profit and losses have occurred, and at least, if it is obviously clear that the amount exceeds the amount prescribed in Article 3 (1) 1 or 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, the amount should be punished as a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation). However, although the court below recognized that the defendants suffered property benefits and losses due to the defendants' occupational breach of trust, the court below judged that the value of property benefits cannot be calculated as a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) that is aggravated on the basis of the value of property benefits due to difficult calculation of the value. The

(2) Unreasonable sentencing

The sentence imposed by the court below to the defendants is too uneasible and unfair.

5. The judgment of this Court

(a) Matters to be determined;

A crime of occupational breach of trust is established when a person who administers another's business in violation of his/her duty obtains pecuniary advantage or has a third party obtain it, thereby causing loss to the principal, and if the amount of profit is above a certain amount, it shall be punished as a crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust). The court below acknowledged that "the defendant conspired to acquire control over Aberland with funds written on transfer, etc. in collusion to issue and allocate convertible bonds without a legitimate resolution of the board of directors, and determined the conversion price as 7,700 won at a price significantly lower than the actual value of the stocks, etc., and caused transfer, etc. to acquire convertible bonds by taking over them as a representative director and directors, and thereby, caused him/her to obtain pecuniary advantage equivalent to the difference between the actual value of 1,254,77 shares by conversion and the conversion price, and rejected damages equivalent to the same amount, and further, the court below asserted that there is a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) within the necessary scope of the crime of breach of Trust.

(b) fact finding;

Comprehensively taking account of the Defendants’ partial statements at the court of the trial, each of the statements made by the prosecutor in each protocol of examination of suspect as to Nonindicted 7 and 8 of the prosecutor’s protocol, each of the statements made by the prosecutor as to Nonindicted 9, 10, 11, 12, 13, and 14 of the prosecutor’s protocol of examination, and the evidence duly examined and adopted by the court below, the following facts can be acknowledged.

(1) On December 23, 1963, Ireland was an unlisted company, an affiliate of Samsung Group, which was established around December 23, 1963 and engaged in such business as facility business, landscaping business, and distribution business for tourists. The total number of shares issued prior to the issuance of the instant convertible bonds was KRW 707,200, par value was KRW 5,000, and capital was KRW 3.536 billion.

(2) Defendant 1 was on duty as the representative director of Liber from September 1993 to June 2002, and was engaged in overall management of Liber. Defendant 2, from November 1, 1993 to February 1, 1997, serving as the managing director of Liber, and was engaged in the business of establishing and implementing the Liber’s financing plan.

(3) In the 1990s, Ireland has established a plan to take place in the world as theme park, and has made a large-scale investment for the renovation and repair of the deteriorated facilities and the construction of new facilities, such as capitals, etc. In particular, approximately KRW 150.1 billion in 1995, approximately KRW 286.8 billion in 196, KRW 132.7 billion in 197. The above investment was procured through the long-term and short-term loans from financial institutions, the issuance of corporate bonds, etc., which led to two consecutive years of interest at the time of the issuance of the instant convertible bonds. The debt also increased continuously after November 1, 1996, and became KRW 7,41.1 billion in around the same year.

(4) However, as of the end of 196, at the time of the issuance of the instant convertible bonds, Liber has reached an amount equivalent to KRW 83.7 billion in total assets, KRW 1,58.1 billion in total capital. Based on the financial statements on December 31, 1996, Liber has maintained a very high credit rating of corporate bills A3 + (i) evaluation of credit rating A3 from the Korea Credit Rating Corporation, and (ii) evaluation of credit rating A3 from the Korea Credit Rating Corporation. (iii) at the interest rate of KRW 30 billion from 11.98% to 12.65%, which is the general market interest rate in 195, and (iv) had received guarantee from the Korea Credit Rating Corporation on June 12, 1996, 50 billion in total and KRW 10.3 billion in total and KRW 16 billion in total from the financial institution’s short-term financing of KRW 19.3 billion in total and KRW 106 billion in total from the financial institution immediately before the issuance of the instant bonds.

(5) Around May 196, Liber predicteds the balance of funds for the one-year period. Around October 1996, Liber borrowed money from a subsidiary around 51.8 billion won of a short-term fund, around November 1996, and around 25.7 billion won of a short-term fund, and was planned to repay each of the obligations to banks and 23 billion won of a short-term loan. However, around May 1996, Liber’s short-term loan was planned to issue the instant convertible bonds around 192.6 billion won, around 196, around 196, around 196, around 196, and around 2,179 billion won of a short-term loan, around 196, around 196, around 2,37 billion won of the total amount of the short-term loan, but the ratio of the short-term loan to the total amount of the loan decreased by 1 billion won around 196.7.6.4.6.96.

(6) There was no fund raising by the method of the issuance of the instant convertible bonds before and after the issuance of the instant convertible bonds, and there was no fund raising by the method of the issuance of the instant convertible bonds, and there was a plan to establish and implement the fund raising plan in advance on a monthly, quarterly, and yearly basis with respect to the necessary funds. The instant convertible bonds did not have been issued at all even in the aforementioned prior financing plan and “the fund plan for October” prepared around September 25, 1996.

(7) On October 196, Defendant 2 issued an order to take measures for raising capital at the business management team (the head of the team, Nonindicted 15 and Nonindicted 16) for the following reasons: (a) around 1996, there was an increase of loans from around 320 billion won for the improvement and repair of facilities in Ireland; and (b) approximately 77% out of them were short-term loans; and (c) there was a need to secure low-term cash in comparison with the size of Ireland; (d) there was an order to take measures for raising capital at the meeting of the board of directors (the head of the team, Nonindicted 15 and Nonindicted 16) on the grounds that there was an increase in the amount of loans from around 100 billion won to KRW 90,000,000,000,000 at the time of issuance of convertible bonds; (e) there was an effort by the board of directors to examine the current market rate of 15 billion won at the time of issuance of new bonds; and (e) there was an increase of KRW 6006 billion.

· Types of bonds: Unguaranteed convertible bonds with non-registered interest coupon;

· Total face value of bonds 9,954,590,000

· The total amount of issuance of bonds: 100% of the face value of the bonds;

· The base date for allocation of bonds: November 14, 1996

· Method of allocating bonds: A third party allocation by the resolution of the board of directors when forfeited after preferential allocation by shareholders;

· Amount of each corporate bond: class 4 of KRW 00,000,000 per day, KRW 00,000, KRW 1000,000;

- Interest rate of bonds: 1% per annum from the date of issuance of bonds to November 29, 199: Provided, That the rate of return on guarantee for the bondholders who have not exercised the conversion right by the due date for repayment of principal of bonds shall be 5% per annum.

· The repayment method and deadline of the principal: The amount equivalent to 112.61% of the principal of the bonds shall be repaid at once on November 29, 199: Provided, That if the repayment deadline is a bank holiday, it shall be the next business day.

· The purpose of use of funds: Facility Fund

· Matters concerning conversion: The number of stocks calculated by dividing 100% of the face value of each bond by the converted price shall be the number of stocks to be converted, and a fraction of less than one share shall be paid in cash when stock certificates are issued, but the conversion price of bonds shall be 7,700 won per share.

· Types of shares to be issued upon conversion: Registered common shares

· The period of request for conversion: The date following the issuance of bonds to the date immediately preceding the redemption date.

· Place at which conversion is demanded: Abandland business management team

(8) However, according to the Articles of Ireland’s articles of incorporation, the agenda of the board of directors prescribed that the resolution of the board of directors shall be made by the attendance of a majority of the directors and by the majority of the members present at the time. At the time, 17 directors of the Ireland were the directors of the board of directors held on October 30, 1996. The minutes of the board of directors meeting held on October 30, 1996, stating that “Defendant 1 was present at the chair and declared that nine directors, including the Defendants and Nonindicted 17, were sexually present at the chair, and resolved with the consent of all the members present at the meeting and with the consent of all the members present at the meeting.” However, since Nonindicted 17, among the directors, was in a foreign business trip and was actually not present at the above meeting,

(9) At the time of the issuance of the instant convertible bonds, the corporate shareholders in Ireland were affiliates or affiliates of Samsung Group, and were separated affiliates. Personal shareholders were 17 former and present officers and employees of Samsung Group’s affiliates, including Samsung Group’s Chairperson and Samsung Group’s Vice Chairperson. The amount allocated to each of the shareholders is as follows.

· Central Daily Report Co., Ltd. (hereinafter referred to as “Central Report”): KRW 4,801,660,000

· The first parent corporation (hereinafter referred to as "the first parent corporation"): 1,407,610,000 won

· Samsung C&T Industries Co., Ltd. (hereinafter referred to as “T&T”): 520,780,000 won

· Samsung Cultural Foundation, a foundation (hereinafter referred to as the “Tsung Cultural Foundation”): 309,960,000 won

· Japan Co., Ltd. (hereinafter referred to as “Japan”) : 292,780,000

· Han-gu District Co., Ltd. (hereinafter referred to as " Han-gu District Co., Ltd."): 94,300,000 won

· Hando Construction Co., Ltd. (hereinafter referred to as the “ Hando Construction”): 95,710,000 won

· Han Chemical Co., Ltd. (hereinafter referred to as “ Handi Chemical”): 91,490,000 won

· New World department stores (hereinafter referred to as “New World department stores”): 22,520,000 won

· 1,310,020,000

· Total amount of individual shareholders: 1,007,760,000

(10) Accordingly, considering that the issuance of the convertible bonds of this case was legally determined with the total amount of 9,954,590,000 won and the conversion price of 7,700 won (the number of shares to be issued by the request for conversion) and the total amount of issued convertible bonds is as follows: (a) on October 30, 1996, Liber sent to shareholders notice of the base date for allocation of convertible bonds; (b) on November 15, 1996, notice of the subscription date; and (c) on November 16, 1996, the total amount of convertible bonds issued, method and allocation amount are as follows; (d) the allocation date is allotted to shareholders listed on the main registry as of the allocation date, but the third party was allotted by a resolution of the board of directors at the time of forfeiture; (d) on December 3, 1996, the subscription date and payment date were 10% of the subscription amount per share and 4% of the subscription amount per share; (e) on the date of subscription (7) the subscription date.

(11) On December 3, 1996, the due date of the subscription for convertible bonds, the shareholders except for the 16:00 on December 3, 1996 as the other shareholders did not subscribe to the subscription, the Defendants held a board of directors at a time of that time and proposed the agenda items to allocate each amount of KRW 4,830,910,00 to Lee Jae-man, who is the south of Lee Jong-hee, equivalent to KRW 4,830,910,00, and Nonindicted 1 (26), Nonindicted 2 (23), and Nonindicted 3 (17 years old) who is his father-hee, respectively, to assign each amount of KRW 1,610,30,000 to Lee Jong-hee, and agreed by all the nine directors present at the time of the above agenda items resolution.

(12) The Defendants knew that, by acquiring convertible bonds, etc., they did not acquire convertible bonds with a high interest rate of 1% per annum, compared to the market interest rate at the time of transfer, etc., the Defendants did not know that large amount of convertible bonds did not subscribe to the existing shareholders prior to the allocation of convertible bonds for transfer, etc., and did not know about the situation, such as the allocation of convertible bonds to transfer, etc. at the same conversion price as the previous ones, and there was no discussion about the calculation of an appropriate conversion price at the time of the resolution by the board of directors on December 3, 196.

(13) On December 17, 1996, Japan and Japan subscribed each of the above convertible bonds with subscription deposits and accepted them on December 3, 1996.

(14) From October 10, 1994 to April 23, 1996, Lee Jae-hee donated KRW 6.14 million to 6.1 billion, and paid gift tax, and acquired 121,880 shares of Samsung Group’s affiliate company (hereinafter “Swon”) with the remaining funds, and 694,720 shares of Samsung Engineering Co., Ltd. were listed within 1-2 years, and the share price of the above two Co., Ltd. increased due to the increase of the share price, there was a profit margin of KRW 53.9 billion. The acquisition price of the instant convertible bonds was also three times from November 13, 1996 to April 23, 199, each of the above convertible bonds was deposited with 60,000 won under the name of the non-indicted Co., Ltd., Ltd. (hereinafter “Swon”), and withdrawn 30,390,196.38,196,196.

(15) On December 17, 1996, Lee Jae-sik et al. filed a claim for conversion of all convertible bonds subscribed to with shares. On March 19, 1997, Nonindicted 16, who acquired convertible bonds from Japan, demanded the conversion of them into shares on March 19, 1997. As a result, the number of shares issued, capital, and the composition of shareholders in Burland before and after the issuance of the instant convertible bonds, became the same as that stated in the separate list of shareholders. Accordingly, the first, the second, second, third shareholders in Burland, the central period of 48.24% (341,123 weeks), the first, third shareholders in Burland, 14.14% (100,000 shares), second, 13.16% (627,390 shares), third, 13.37% (6390 shares), third, 17.314% (31,294%) of this case, and second, 1319% (1306 shares).

(c) Assignment of duties;

An act in violation of one’s duty in breach of one’s duty includes any act in violation of a fiduciary relationship with the principal by failing to perform such act as is naturally expected under the provisions of the Act, the terms and conditions of the contract, or the good faith principle in light of specific circumstances, such as the content and nature of the business to be handled (see Supreme Court Decision 83Do1568, Apr. 28, 1987). In particular, when a director of a corporation issues convertible bonds, he shall comply with the relevant Acts and subordinate statutes and the articles of incorporation, as well as with the duty of due care as a good manager (hereinafter “duty of due care”) (see Article 382(2) of the Commercial Act; Article 681 of the Civil Act). In determining the conversion price, he shall be determined at an appropriate price by reflecting, at the time of the issuance of the bonds, the maximum price of the stocks at issue, the period of the request for conversion, etc., of which is remarkably lower than the reasonable price of the stocks at the time of issuance of the convertible bonds, and taking over them by a third party.

(1) “A resolution of the invalid board of directors which falls short of a quorum”

(A) The lower court determined that the resolution of the board of directors on October 30, 1996 for the issuance of the instant convertible bonds was null and void because it was made under the condition of short of the quorum for the resolution set forth in the Commercial Act and the articles of incorporation, as seen earlier, and there is no error of misunderstanding of facts or misunderstanding of legal principles. The Defendants asserted that the resolution was valid as a written resolution since they followed the affirmative votes of Nonindicted 17 in a foreign business trip at the time. However, as seen earlier, the minutes of the board of directors held on October 30, 1996 at the time of Liberland did not appear in the chair and stated that “the board of directors held on October 30, 1996, including the Defendants and Nonindicted 17, were present at the meeting of the board of directors, and it did not appear in this case with the consent of all the members present at the time of the meeting and did not appear in the meeting, and thus, it did not appear to have been consistent with the premise that the above resolution was invalid or invalid after the meeting’s present.

(B) As seen earlier, the resolution of the board of directors on October 30, 1996 was null and void because it falls short of the quorum, which is the most fundamental requirement of the resolution. The Defendants were well aware that the above resolution was null and void due to the attendance at the meeting as a director or representative director or presiding at the meeting, and thus, it would be too well known that the above resolution was null and void due to the quorum. Therefore, it would be unreasonable for the Defendants to go to the conversion issue as if they knew that the resolution was null and void due to the lack of quorum, to the

(C) As seen earlier, the resolution of the board of directors on October 30, 1996 becomes null and void. As such, the Defendants do not proceed to the procedure for allocating subscription to convertible bonds even for each of the instant shareholders. In addition, even if the Defendants were to take the procedure for allocating subscription notice, etc., only the first day from among the existing shareholders who received the notice of subscription to convertible bonds in this case, made an offer to subscribe to the pertinent convertible bonds (2.94%) and the remaining shareholders did not make an offer to subscribe to the pertinent convertible bonds (97.06%). In such a case, apart from whether the first day’s subscription to the convertible bonds allocated according to the invalid resolution of the board of directors is null and void, it cannot be deemed that the rest of the shareholders did not have the legal effect on the issuance of the subscription, and thus, it cannot be interpreted that the invalid resolution is valid, and thus, the Defendants’ act of allocating the shares cannot be deemed null and void even if it was no more than the third party’s consent to the allocation of the convertible bonds.

(D) The Defendants asserted that the defect in the invalid resolution was cured by a resolution of the board of directors on December 3, 1996. However, even if the resolution of the board of directors on December 3, 1996 is valid (in the case of the board of directors on December 3, 1996, there is a question as to whether all the directors were given a notice of convening the board of directors, and if the minutes of the board of directors on October 30, 1996 and the minutes of the board of directors on December 3, 1996 are revised, the order and location of the two minutes are equal, and the seal affixed with the seal of the board of directors is affixed with the seal of "the seal of the board of directors" as well as the seal affixed with the seal of the board of directors on December 3, 1996, the number of auditors affixed with their signature and seal did not appear at the meeting of the board of directors, and there is no room to presume that the resolution of the board of directors was invalid by 196 minutes of the board of directors.

(E) If so, the defendants' resolution of the board of directors on October 30, 1996 fell short of the quorum and thus invalid, it constitutes a breach of duty to allocate convertible bonds to Lee Jae-in, etc., a third party by a resolution of the board of directors on December 3, 1996, even though they were aware that it was invalid.

(2) “Assign to a price significantly low for the use of materials to a third party.”

(A) As seen earlier, in a case where a director of an unlisted corporation, such as Burland, issues convertible bonds at the conversion price with the amount significantly lower than the appropriate price of the stocks of the non-listed corporation, and acquires them by a principal or a third party, the acquirer of the convertible bonds shall acquire property benefits equivalent to the difference between the reasonable price of stocks and the conversion price, and the corporation shall incur damages equivalent to the same amount (see Supreme Court Decisions 2001Do3191, Sept. 28, 2001; 2003Do5309, May 27, 2005; 2003Do5309, May 27, 2005). In a case where convertible bonds are issued, the conversion price shall be determined at the reasonable price reflecting the bond interest rate at the time of the issuance of the bonds, the period for the request for conversion, and the issuance of convertible bonds shall be in violation of his duties if they are issued at the conversion price. Meanwhile, the market price or actual value of the non-listed corporation shall be determined at the reasonable price of each transaction.

(B) Accordingly, based on the above legal principles, it is reasonable to view that the conversion price of KRW 7,700 per share, which the Defendants issued the instant Burland’s convertible bonds and had them acquire to victims, etc., constitutes a price significantly lower than the market price or reasonable price.

(1) The stock price expressed in the case of transactions, etc.

The case holding that (a) around July 1, 1993, Hando's 6,80 shares of Samsung City's 18,500 shares were sold to Hando's 18,500 shares as 85,00 shares per share; (b) Nonindicted 18,19, and 20 shares were sold to Hando's 18,50 shares as 89,150 shares per share; (c) Korea's 6,800 shares were sold to Samsung City's 1993; and (d) 9,00 shares were sold to Samsung City's 19,00 shares as 9,00 shares per share; and (d) 19,000 shares were sold to Samsung City's 2,00 shares as 9,00 shares per share; and (d) 19,000 shares were acquired to Samsung City's 2,010 shares per share as 9,000 shares per share.

On the other hand, comprehensively taking account of the above evidence and the statement of the fact-finding inquiry report on Samsung C&T, ① Korea-U.S. dollars and Korea-U.S. chemical and Korea-U.S.A.M. trade cases, etc. ①, in order to solve the requirements for separation of affiliation from Samsung Group (group 3%, each of them is less than 1%), Korea-U.S.A. or non-indicted 21, as a partner company, personally known to the non-indicted 22, will purchase the above shares at an amount calculated by adding the principal and interest of 4.5% per annum to the principal and interest of 4.5% per annum at the time of the purchase of the shares, and thereafter, the purchaser demanded the purchase of the above shares at the Hando-U.S. price again, ② the price calculated by adding interest to the purchase price of the shares from Samsung T&T construction to the above purchase price of Samsung C&T and the acquisition price of Samsung C&T's shares at KRW 980,000 per annum.

Of the above cases, the case where Samsung C&T acquired 1,80 shares of Samsung C&T at KRW 14,825 per share in the merger with Samsung Construction, although the acquisition value recorded in the account book is accepted, it is the most recent transaction as of December 3, 1996, when the convertible bonds of Samsung C&T of this case were issued. In the event of a merger between companies, it is ordinarily reasonable that the merged corporation calculated the asset value of the company subject to acquisition and set the merger ratio between the two companies. Since the merger contract between Samsung Construction and Samsung C&T of December 31, 2005 did not freely comply with the market economy demand and supply basic principles, there is room to recognize the adequate price of shares of Samsung C&T from Samsung Construction as the price of shares at the time of issuance of the convertible bonds of this case.

(2) The stock price indicated in the book value.

According to the above evidence, it is recognized that the share price of the Burland in the financial statements of 1996 was stated as KRW 125,00 for the New World Department Store, KRW 234,985 for the New World Department Store, KRW 234,985 for the Central Group, KRW 4,878 for the Central Group, KRW 5,00 for the Japanese Department, KRW 5,00 for the Japanese Department, KRW 9,280 for the Samsung T&T, KRW 9,283 for the Samsung T&T, KRW 14,825 for the Samsung T&T, KRW 89,150 for the Han T&T, and KRW 89,290 for the Han Construction.

However, in the 1970s, the new World Department Store entered KRW 200 million of the acquisition value of the stocks of the hotel acquired in the 1970s by the hotel later by dividing it by 1,600 shares in Ireland, which were received by the hotel hotel in the 1,600s, and the first 1994, the first 200 million won of the acquisition value in the 1994, shall be calculated based on the net asset value on the financial statements provided by Baland in the course of asset re-evaluation. The remaining corporate shareholders shall not change the amount after the initial acquisition value was entered in the books, or after the revision of the corporate accounting standards after the 1997, or after the revision of the 1997, after changing the entry into books by evaluating the net asset value of the stocks of Baland as of the end of 1996, Han-gu chemical was 215,50 won as of the end of 198, 197, 196.

Meanwhile, among the above book values, the book value of KRW 4,878 in the financial statements of the year 1996, KRW 5,000 in the Central Day, KRW 4,878 in the first place, and KRW 5,000 in the Han-do, and KRW 9,283 in the Samsung Cultural Foundation, all of which were first acquired by the shareholders of the above corporation in the 1960s or 1970s, shall be recorded in the book as it is, and the value of the shares was not changed for a long time, and there was a considerable interval of time from December 12, 196, the time of acquisition, which is the time of issuance of the convertible bonds of this case, it is difficult to refer to

If so, the value within the range from 14,825 to 234,985 won among the book value of the shares of the shareholders of the above corporation shall be considered in calculating the reasonable amount of the convertible bonds of this case.

(3) The stock price by the method of assessment.

The valuation method of unlisted stocks is generally adopted: (i) The Asset Value Act does not reflect the company’s future value by assessing the value of net assets (total assets - total liabilities); and (ii) it has advantages that most assets are useful and objective in assessing the value of a company comprised of tangible assets and can be assessed. (ii) The Profit Value Act, by assessing future net profit value, has the cash flow method that discounts the value of cash flow that can be gained in the future as the result of the company’s business activities at an earning rate of an enterprise. The method of exchanging dividends requires an estimate of dividends over a considerable period of time according to the expected amount of dividends; (iii) the method of calculating the value of cash flow that is similar to the company’s current valuation method is the most reasonable method of calculating the value of the company’s dividends, but it is difficult to assess the value of the company’s future valuation method of cash flow that is similar to the company’s current valuation rate of 20th, 30th, 40,000 if the parties to the sale and purchase are not related to the company’s dividends.

On the other hand, in the evaluation method of unlisted stocks which are required by the law, the asset value law is followed in the evaluation of unlisted stocks under the corporate accounting standards, and the inheritance tax and gift tax law is applied in principle to the transaction price, but it is complementary to the total value of asset value and profit value.

Considering the fact that there is a dominant shareholder rather than a general investor who expects dividends, it is inappropriate to apply the dividends exchange method. The cash flow method can reflect future values, but it is highly likely for an evaluator to intervene. It is not easy to select an enterprise similar to the company subject to comparison even if the comparison method differs considerably depending on which an enterprise is to be selected as a comparative company, so there is no adequate comparative company, so the net asset value method in the valuation method of the company is the largest and is generally used in the way that the net asset value method in question is at least the value of the company in question, and the net asset value of the company is also at least 100,000,000,0000,0000,0000,000,0000,000,000,000,000,000,000,000,000,000,000,000,00,000,00,000).

However, Defendants asserted that the pertinent conversion price of this case is determined at an appropriate level of KRW 7,700 per share, as the result of an evaluation of the adequate share price by requesting an Ansan Accounting Corporation to conduct future cash flow, and 10,412 won based on the estimates. However, as seen earlier, the above evaluation method is appropriate as the value analysis method of an enterprise operating information technology industry which mainly serves a significant portion of future profits, and it is difficult to determine cash flow or discount rate, which is an essential element of the stock price calculation, and there is room for an evaluator to intervene in the evaluation process. As indicated in the reasoning of the court below, the above evaluation method is difficult to accept as the current appraisal rate of KRW 1,446, and KRW 10,412 per share based on the estimates. ② It is difficult to apply the current appraisal rate of KRW 185,00 per share to another corporation with a similar company with a view to the changes in the market profit rate of securities at its own expense.

In addition, according to the evidence as seen earlier, the share price in Ireland evaluated by supplementary evaluation methods under the Inheritance Tax and Gift Tax Act at the time of the issuance of the instant convertible bonds can be recognized as 127,755 per share. However, the provisions of the Inheritance Tax Act are merely supplementary evaluation methods for the purpose of determining the tax base within the scope acceptable by the tax authority in consideration of equity and convenience in taxation when imposing taxes on inheritance and donation of assets mainly between relatives, based on the premise that the inheritance and donation are made between relatives. As seen earlier, according to the aforementioned special circumstances, it cannot be deemed that the valuation methods under the Inheritance Tax and Gift Tax Act, which used the past profit and loss as evaluation factors from 195 to 1997, are not appropriate methods for calculating the share value of the E.I.D.’s non-listed stocks under the Inheritance Tax and Gift Tax Act, and it cannot be deemed that the aforementioned valuation methods are the market price of the stocks immediately after considering the lack of detailed evaluation methods by the head of the Korea University of Management Professor in a foreign language.

If so, it is appropriate to adopt the net asset value method as seen earlier in principle: Provided, That the net asset value method has failed to conduct an evaluation in the dynamic aspect of an enterprise operating as the subject of economic transactions, and it cannot be said that it is complete with the method of appraisal of the company's stocks, without reflecting the future value of the enterprise. In addition, even if there is a large amount of net asset value per share, it is difficult to expect the acquisition of new stocks at the actual price if the current management status (such as profit and dividend situation) of the company is bad. Therefore, it is necessary to appropriately reduce the value calculated by the net asset value method in consideration of such circumstances.

(4) A remarkably low conversion price.

As seen earlier, as seen in the case of trading, merger, issuance of new shares, etc. with respect to the shares in Ireland, the shares in Ireland were traded from July 1, 1993 to April 18, 199 to KRW 14,825 per share to KRW 100,000 per share. The book value of the shares in Ireland, which can be a reference for calculating the appropriate price of the convertible bonds in this case, is distributed from KRW 14,825 to KRW 234,985, and the net asset value per share at the time of the issuance of the convertible bonds in Ireland as the most appropriate net asset value assessment method with respect to Ireland, is about KRW 23,659 (net asset value per share 158,171,802, 488 ±707, 2007, 207, 2057) based on the book value recorded in the book, and is calculated by the market value of the shares in Ireland.

However, in this case, the issue is whether the appropriate market price of convertible bonds issued by Ireland is what is, and in principle, one evaluation method is just and unreasonable, and even if the method of net asset value is adopted, it is necessary to revise the appropriate reduction accordingly. In addition, a comprehensive consideration should be given to the fact that the defendants were to make a reasonable decision as the price of convertible bonds.

However, in the issuance of the convertible bonds of this case, it is reasonable to view at least 14,825 won per share at the time of the issuance of the convertible bonds of this case, considering all the above circumstances as the lowest.

Therefore, 7,700 won per share, which is the conversion price of the convertible bonds of this case, shall be assessed to be a price significantly lower than 14,825 won, which is the minimum price of the shares in Ireland at the time of issuance. There is no special circumstance to have determined the conversion price of the convertible bonds of this case at the time of issuance.

(C) However, the Defendants, as the representative director or director of the Ireland, attended the resolution of the board of directors on October 30, 1996 and did not at all examine the appropriate conversion price of shares issued by conversion. Meanwhile, apart from the view that the conversion price of convertible bonds should be set at an appropriate price even in the case of the third party allocation as well as the distribution of shares, as seen earlier, the resolution of the board of directors on October 30, 1996 is null and void as the resolution of the board of directors on October 30, 1996 is less than a quorum, and it is also null and void that the resolution of the board of directors on October 30, 1996 that "which shall be allocated to the third party at the time of forfeiture of rights, shall be allocated to the third party at the conversion price in accordance with the above invalidation resolution, and even if the existing shareholders did not subscribe for the subscription, the Defendants’ act of clearly lowering the conversion price to the third party without any review in the invalid resolution constitutes an act of the board of directors.

(3) “Transfer control over a particular person”

(A) This part appears to be included in the facts charged of this case as decided by the court below, and even without doing so, it is a matter that can be recognized without changing the indictment, since the court below and the court below imposed sufficient attack and defense against them (the summary of each pleading submitted by the counsel to the court also contain arguments about them).

(B) There is a view that the board of directors’ issuance of convertible bonds in order to increase the ratio of shares of a specific person violates the duty of a director’s delegation. Furthermore, it cannot be said that the Defendants breached the duty of care as a director to acquire control over the company by allocating convertible bonds to a specific person upon leaving the position of a professional manager. Thus, the Defendants’ issuance and allocation of convertible bonds under the pretext of raising funds for the company’s facilities under the status of a mere professional manager, without the consent of the existing shareholders, exceed the purpose of raising the company’s funds ordinarily planned in the issuance of convertible bonds, which goes beyond the authority of a director, and thus, the issuance may become null and void (see Supreme Court Decision 200Da37326, Jun. 25, 2004; 200Da37326, Jun. 25, 2004). Moreover, if the Defendants breached their duty of care and duty of care, they should be deemed to have breached their own duty of care and duty of care as the controlling shareholder’s assets.

(C) As seen earlier, the Defendants did not proceed to allocating the instant convertible bonds to a third party based on a resolution of the board of directors null and void on October 30, 196. Moreover, it is no longer likely that the Defendants would have changed control over a certain third party beyond the ordinary scope of raising the instant convertible bonds because of the fact that there was no change in management situation, such as default or introduction of new technology, etc. in the case of Burland. Nevertheless, the Defendants would have easily acquired control over a certain third party beyond the ordinary scope of raising the instant convertible bonds as indicated in the separate list of shareholders through the act of allocating the instant convertible bonds, 48.24% to 17.06% of the total number of shares issued by Burland, 14.14% to 5% of the shares issued by Burland, and 20% of the shares issued by 30% of the total number of shares issued after the issuance of the instant convertible bonds.

(D) The Defendants asserted that, even if the instant convertible bonds were issued for the purpose of transferring control, it is reasonable to view that shareholders consented and approved to allocate the instant convertible bonds to a third party by waiver of their subscription. As such, shareholders were allocated convertible bonds that have waived subscription to the instant convertible bonds to a third party, and thus, they cannot constitute a breach of their duties against the company. However, shareholders merely did not subscribe to the issuance of the instant convertible bonds. However, it is difficult to interpret the instant convertible bonds as the consent or implied consent to the effect that the issuance of the instant convertible bonds would be adequate for the issuance of the instant convertible bonds by taking advantage of such omission to a third party and by allocating them to a third party. Furthermore, as seen earlier, the resolution of the board of directors on October 30, 1996, which decided to issue the instant convertible bonds, is null and void, and the shareholders did not respond to the subscription of the instant convertible bonds without any response, and thus, it does not constitute remedy or conversion to the effect of invalidation.

(4) “An act contrary to the duty” was committed.

Since the Defendants, as the representative director or directors of Ireland, issued convertible bonds at a remarkably low price of 00 billion won for the issuance of new convertible bonds to third parties, etc. without undergoing lawful procedures, the Defendants breached their duties in relation to the company regardless of whether the issuance of the convertible bonds of this case is substantially unfair or not, and whether the existing shareholders did not subscribe for underwriting, etc., as stated in the lower court. However, even if the Defendants were to have made a prudent decision with the view that it would be consistent with the interests of the company on the basis of the information collected in good faith without any personal benefit because the management risks inherent in the management of the company, and thus, it may not be deemed that there was an urgent need to allocate the new convertible bonds at a certain price of 0 billion won for the issuance of new convertible bonds to 70 billion won after the issuance of the new convertible bonds, the Defendants’ act of acquiring the new convertible bonds at a certain price of 00 billion won or more, and thus, it may not be deemed that there was an urgent demand for the issuance of the new convertible bonds at a certain price of 1 billion won or more.

(d) Property profits and losses;

(1) In a case where a director of an unlisted company, such as Aberland, issues convertible bonds with a remarkably lower amount than the market price of the company’s stocks at the conversion price and acquires them by either the principal or a third party, the Supreme Court has established that the acquirer of the convertible bonds obtains pecuniary benefits equivalent to the difference between the market price of the stocks and the conversion price, and that the corporation causes damages equivalent to the same amount (see Supreme Court Decision 2001Do3191, Sept. 28, 2001; Supreme Court Decision 2003Do5309, May 27, 2005). In particular, in a case where the Defendants allocated convertible bonds to Lee Jae-il to exercise control over the company, etc. in order to transfer control over the company, the number of stocks issued at the conversion price and the conversion price, and thus, the above precedents should be applied.

(2) Therefore, in different legal opinions from the above precedents, the company raises funds by issuing convertible bonds, and where the convertible bonds are fully converted, the company's accounting liability is converted to its capital, and the company's assets are capital transactions without any change in its assets, as well as capital transactions with no change in its assets, and even if the issuance price of the convertible bonds of this case differs from the total amount of the issuance, the company does not incur loss since there is no difference in the total amount of the issuance.

(3) In addition, as seen earlier, insofar as the Defendants committed an act in violation of their duties and caused damage to the company, the establishment of the crime of breach of trust cannot be denied on the ground that the above precedents and theories have not been established at the time of issuance of the instant convertible bonds.

(4) The Defendants asserted that the above precedents exclude the preferential acquisition right of shareholders and issued convertible bonds from the beginning with the issuance of convertible bonds by a third party. As in this case, the preferential acquisition right of shareholders is not applied if shareholders give up their subscription rights, and since shareholders, not the company, the management right of the company, is also applicable to shareholders, it is not a company. Accordingly, shareholders of Liber did not incur losses by acquiring the management right of the company. In particular, shareholders in this case, who voluntarily give up their preferential acceptance of convertible bonds, did not incur losses to shareholders. However, if the Defendants complied with the laws and regulations, articles of incorporation, and other procedures and performed their duty of care and performed their duty of care, the Defendants’ assertion is reasonable, but the resolution of the board of directors at the stage of October 30, 1996, which was decided to issue the convertible bonds of this case, is invalid as the quorum of the board of directors, and there is no difference between the shareholders' notice of the allocation of convertible bonds or their intent from the beginning of this case, and the Defendants' assertion that the above issuance of convertible bonds is not effective.

(5) Therefore, in accordance with the aforementioned precedents, the Defendants calculated the conversion price at least 14,825 won per share, which is remarkably lower than 14,825 won per share, as a result of allocating the entire amount of the convertible bonds of this case, which had not been subscribed for subscription to the convertible bonds of this case to Lee Jae-il, etc., and acquired them by converting them into stocks after taking over them and converting them into the stocks, and thereby acquiring them, the above converted amount of KRW 18,602,069,025 ( KRW 14,825 x 1,254,77 x 1,257 x 1,254), and the acquisition price of convertible bonds, the transfer price of which is 9,61,810,000 won, which is 9,61,810,000 won, which is 8,940,259,025 won, and it shall be deemed that

(6) Therefore, the lower court’s judgment that determined otherwise is erroneous in misunderstanding of facts or misunderstanding of legal principles. Even if it is not so, for example, even if the conversion price is considerably lower than the reasonable price per share, damages exceeding KRW 500 million should be applied to at least Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. However, even though the lower court recognized that the conversion price determined by the Defendants is considerably lower than the reasonable price, the lower court merely recognized it as a crime of occupational breach of trust on the ground that it cannot be calculated on the grounds that the conversion price determined by the Defendants was significantly lower than the reasonable price. In this regard, the lower court erred

(e) The meaning of a crime;

(1) In order to establish a crime of occupational breach of trust, the perception of occupational breach of trust as a subjective requirement and its consequence that the person or a third party obtains benefit and causes loss to the principal, i.e., the intent of breach of trust, and such recognition is sufficient with dolusent perception (see Supreme Court Decision 2004Do520, Jun. 24, 2004). In addition, in a co-offender relationship where two or more persons jointly commit a crime, public offering does not require legal fixed penalty, but is a combination of intent to realize a crime by combining two or more persons to jointly process a crime and realize the crime. Even if there was no overall mother process, if there was a combination of intentions, it is established a public solicitation relationship (see Supreme Court Decision 2006Do3631, Aug. 25, 2006). On the other hand, public offering or intent constitutes an indirect crime, based on the empirical rule-based objective or circumstantial relevance between the defendant and the defendant, there is considerable reason to reasonably establish such indirect crime (see Supreme Court Decision 2000Do4).

(2) According to the aforementioned evidence and facts, Defendant 1, as the representative director of the Burland at the time, overall management of the Burland was comprehensively controlled, and Defendant 2, as the chief executive officer at the time of the issuance of the instant convertible bonds, engaged in the establishment and execution of the financing plan of the Burland as the head of the management support office. Defendant 2, despite being aware of the fact that there was no urgent managerial crisis or development of new technology at the time of the issuance of the instant convertible bonds, which requires urgent financing, and that the allocation of convertible bonds is likely to cause changes to controlling shareholders, he would have decided to issue the instant convertible bonds with a small amount of funds. The Defendants were present at the board of directors and decided to issue the instant convertible bonds with a view to acquiring the control shares of Burland at least KRW 70,000,000,000,000,000 per share, and, in fact, there was no other need for the board of directors to acquire the instant convertible bonds with an attempt to allocate stocks at least 5,00,0,0,0000, etc.

(3) In addition, even if the defendant had the intent to act for the victim's own interest, it should be deemed that there was an intentional crime of breach of trust if it is found that the defendant had the intent to act for the victim's own interest and that the intent to act for the benefit or damage was the principal (see Supreme Court Decision 2001Do4857, May 14, 2004, etc.). However, even if the defendant made an internal decision-making process such as the resolution of the board of directors in advance, in light of various circumstances such as the purpose of the transaction, the process and contents of the contract, the scale of the transaction amount, and the financial status of the company, if it exceeds the permissible limit as a normal transaction due to business necessity, and it is merely for the personal interest, it constitutes an act of breach of trust (see Supreme Court Decision 2005Do856, Apr. 29, 2005). Even if there was no purpose to raise funds of the convertible bonds of this case, it can be held liable for breach of trust against the defendants.

(4) The Defendants asserted that, even if the convertible bonds of this case were issued for the transfer of control, and the control was actually transferred to Lee Jae-in, it is reasonable to view that the existing shareholders consented and approved the transfer of control as a result of the waiver of the acquisition of the convertible bonds by themselves, and that, until now, the above shareholders do not have any objection to the transfer of the convertible bonds of this case, the conversion price of the convertible bonds of this case is less than the price of the convertible bonds to the directors on the ground that they were transferred to Lee Jae-in, etc. However, the existing shareholders merely did not make an offer for the acceptance of the convertible bonds allocated according to the invalid resolution of the board of directors, but they cannot be deemed as having legal effect, and further, they cannot interpret this omission with the consent of a third party. Further, even if so, it is not clear whether the above shareholders have raised any objection to the allocation of the convertible bonds of this case to the third party, and even if so, it cannot be justified to establish the crime of breach of trust (see, e.g., Supreme Court Decision 2005Do2985.

(5) In order to establish a crime of breach of trust in this case, the Defendants should forfeit the rights of shareholders holding the preferential right of convertible bonds. Thus, prior to the issuance of convertible bonds, shareholders should either publicly recruited with or accepted the forfeiture of rights from shareholders, or at least after the resolution of issuance, shareholders should have forfeited the rights. Since the facts charged in this case or the judgment of the court below did not contain any provision as to this, the facts charged in this case are not specified in this part of the facts charged, or the judgment of the court below did not state specific acts as to public offering, process of agreement, and Defendants’ specific acts. However, the court below asserted to the purport that “the Defendants did not have any duty to acquire control over the shares by allocating the convertible bonds to Lee Jae, etc. for a resolution which becomes null and void without due process for the issuance of the convertible bonds with a small amount of funds, and thus, it did not necessarily violate the Defendants’ duty to acquire control over the shares by allowing them to acquire them.”

F. Summary of the judgment

The Defendants, as the representative or director of the Ireland, failed to pass a resolution of the board of directors null and void for lack of quorum in order to transfer control over Ireland to Lee Jae-in, etc. in violation of the Acts and subordinate statutes and the articles of incorporation as well as the duties of a good manager, and caused Lee Jae-in, etc. to acquire control rights by allocating convertible bonds to Lee Jae-in, etc., thereby in violation of their duties, thereby obtaining pecuniary gains equivalent to KRW 8,940,259,025 from Lee Jae-in, etc., causing damage to the same amount of money, and it is recognized that the Defendants were aware of such act.

Therefore, the court below's determination that "the crime of occupational breach of trust by the issuance of the convertible bonds of this case against the defendant can be recognized as property damage, but since the value of property profit acquired by transfer, etc. cannot be calculated in detail, it shall not be calculated as a crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) which is to be punished additionally based on the value of property profit."

Therefore, the defendants' assertion of misunderstanding of facts or misapprehension of legal principles is without merit, while the prosecutor's assertion of misunderstanding of facts or misapprehension of legal principles is partially justified.

6. Conclusion

Therefore, the judgment of the court below shall be reversed under Article 364(6) of the Criminal Procedure Act without examining the defendants and the prosecutor's argument on unfair sentencing, and the judgment shall be rendered again through pleading as follows.

Defendant 1 served as the representative director of the Berland established from September 1993 to June 2002 for the purpose of the business of using facilities for tourists and engaged in overall management of the Berland. Defendant 2 served as the managing director of the Berland from November 1, 1993, as the managing director of the Berland, and was engaged in the business of formulating and implementing the financing plan of the Berland. Defendant 1 worked as the representative director from February 1, 1997 to June 2002 through the managing director and the vice president from January 2001.

The Defendants, using the method of issuance of convertible bonds, had total assets exceed KRW 80 billion at the time, and had large-scale facility investments exceeding KRW 580 billion under the long-term plan for fostering the globalme park, with a high inherent value and growth potential. On the other hand, the Defendants were merely 3.536 billion won in the size of capital, and thus it is easy to secure the control shares, which is the unlisted company of Samsung Group affiliated with Samsung Group, with a view to having them acquire the control rights of Samsungland, which is the unlisted company of Samsung Group affiliated with Samsung Group, with a view to getting them acquire with a small amount of money;

On October 30, 1996, at the conference room of the Ireland, which is located in the 310 Mag-si Mag-si 310 representative, the resolution of the board of directors was made. The Defendants had a duty to go through legitimate procedures, such as the resolution of the board of directors as the representative director or director of the Ireland. While the majority of the registered directors and the resolution of the board of directors is required by the Commercial Act and the articles of incorporation, only eight persons who fall short of the majority of the 17 directors among the 17 directors attend the meeting, “type of bonds: non-registered bonds with non-registered interest coupon, non-registered convertible bonds, the total face value of the face value of the bonds: 100% of the face value of the bonds, 100% of the face value of the bonds, 1% per annum, 5% per annum, annual rate of return on maturity: 5% per annum, 70% per annum from the date following the date of request for conversion, 70% per year from the date of redemption,”.

As the Defendants knew that the resolution of the board of directors below the quorum is null and void and void, the Defendants were no longer possible to proceed with the procedure for issuing convertible bonds because they were aware that the resolution of the board of directors below the quorum is null and void, they did not make a notification on the date of allocation, peremptory notice of forfeited stocks, etc. to shareholders, and 25 members, other than the company No. 1 corporation, among 26 shareholders in Ireland, did not make any subscription for acceptance at least KRW 96,1810,000,00,000,000, which is about 9.7 billion,000,000,000,000 won of the total amount of issued convertible bonds allocated to them, the above resolution of the board of directors is null and void, and thus the above resolution of the board of directors cannot be assigned to a third party with convertible bonds whose subscription was not yet made by the above invalid resolution of the board of directors, and the case and the transaction price thereof, its basis, etc. shall not be examined, and it shall not be applied to the above third party without reasonable allocation price of stocks.

On November 1, 1996, at the end of 196, it was intended to transfer management rights in Ireland to Lee Jae-il, etc. with a small amount of funds, and around 16:00 on December 3, 1996, the board of directors was held at the meeting room in Ireland, and the amount of 7,700 won, as stated in the above invalid resolution, is considerably lower than 14,825 won, the total amount of 9.66,1810 won, among the total amount of 9.666,1810 won, the total amount of 9.6 billion won, 70 billion won, 1.65 billion won, 20 billion won, 30 billion won, 1.60 billion won, 1.6 billion won, 1.67 billion won, 1.6 billion won, 300 billion won, and 1.6 billion won, 270 percent shares, and 160% of the total amount of convertible bonds and 970 percent shares, 160%, respectively.7

In the summary of the evidence of the court below, except for adding "the defendant's each statement in the court room, each statement in the protocol of interrogation of each suspect against the defendant 7 and 8 prepared by the public prosecutor, each statement in the protocol of interrogation of the suspect as to the non-indicted 9, 10, 11, 12, 13, and 14 in the protocol of interrogation of the public prosecutor, and each statement in the protocol of protocol of interrogation of the public prosecutor is recorded in the corresponding column of the court below." Thus, it is cited in accordance with

1. Relevant Article of the Act concerning the facts constituting the crime and the selection and concurrent imposition of punishment;

Each, Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356, Article 355 (2), and Article 30 of the Criminal Act (Selection of Imprisonment) and Article 3 (2) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Concurrent Imposition of Fines)

1. Discretionary mitigation;

Each, Article 53, Article 55(1)3 and 6 of the Criminal Act

1. Invitation of a workhouse;

Articles 70 and 69(2) of the Criminal Act

1. Suspension of execution;

Each, Article 62 (1) of the Criminal Act

As to the part of KRW 88,054,03,075, which was found guilty of the Defendants of this case among KRW 96,94,262,10, which was prosecuted against the Defendants of this case, the remaining KRW 88,940,259,025, which was derived from the amount of KRW 88,05,00,00,075, should be acquitted pursuant to the latter part of Article 325 of the Criminal Procedure Act, since there is no proof of a crime. However, as long as it is found that the Defendants were guilty of a crime within the scope of the same facts charged, the part

[Attachment List of Shareholders]

Judges Jo Hee-de (Presiding Judge)