2003 Gohap16871 Nullification of the issuance of new shares

MDBS Co., Ltd.

A Stock Company

November 12, 2004

November 2004, 25

1. We affirm that the issuance of new shares of 3,738,317 shares in registered ordinary shares, the par value of which is 500 per the defendant on November 25, 2003, is null and void.

2. The costs of lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Basic facts

A. The defendant is a stock company incorporated on December 12, 199 for the purpose of manufacturing and selling medical devices.

Before the issuance of new shares, such as the issuance of new shares as stated in paragraph (1) above, the total number of the issued shares was 24,561,695 shares (50 shares per share). The Plaintiff held 2,092,742 shares (8.52%) in its own name among them, and held 6,939,545 shares (28.25%) in total when combined with shares held by B, C, F, G, and auditor under its related party’s name, and held 904,581 shares (3.68%) including those held by the Defendant’s representative director D, directors E, F, and auditor.

B. The Defendant, on November 24, 2003, held a board of directors and issued 1,070 won per share (500 won per share), the subscription date and due date 2003,11,25. The Defendant decided to allocate 2,076,635 shares to the Bionet Co., Ltd., Ltd., and the 1,661,682 shares to have them take over all new shares. The Defendant, upon paying the share capital on November 25, 2003, issued 3,738,317 shares and completed the registration of the issuance of new shares (hereinafter “new shares”). The Defendant acquired 3,738,317 shares and completed the registration of the issuance of new shares at the board of directors’ meeting pursuant to the resolution of the Defendant’s 3,738,317 shares and 400 U.S. shares issued at the same time as the 3,7400 U.S. shares issued at the board of directors’ meeting (hereinafter “this case”).

D. Meanwhile, according to the resolution of the board of directors on November 24, 2003, the defendant accepted the amount equivalent to KRW 840,000,000 of shares of the Hannet Co., Ltd., and KRW 1,000,000 of convertible bonds, KRW 21,000 (the conversion price is KRW 21,000) and KRW 938,000 of bonds with warrants (the exercise price is KRW 21,00) and KRW 222,00,000 of bonds with warrants (the conversion price is KRW 10,000) on the same day.

E. The Defendant’s total shares were 28,300,012 shares (24,51,695 shares + 3,738,317 shares) due to the issuance of the above new shares and the shares of the Plaintiff and its specially related persons were 24.52%. On the other hand, if the number of shares held by the Defendant’s management and specially related persons is 4,642,898 shares (9,581 shares + 3,738,317 shares) with the aggregate of the number of shares newly allocated to the Defendant’s management and its specially related persons, the number was 4,682,898 shares (9,581 shares + 3,738,317 shares) and the shares ratio was 16.41%, but if the DaD M&P exercises its preemptive rights as above, the shares ratio of the Plaintiff and its specially related persons was 6,939,545 (28,301,3040,4074 shares + 27484,484) shares shares of the Defendant management were 4.

F. At the time of the issuance of the new shares in this case, the Plaintiff promoted hostile acquisition against the Defendant, and there was a dispute over the management right between the Defendant management and the Defendant management, and the Fund was a friendly force for the Defendant management. The Fund was all a friendly force for the Defendant management.

[Ground for Recognition: Facts without dispute, entries in Gap evidence 1 through 18 (including branch numbers in the case of additional number), the purpose of the whole pleadings]

2. Determination:

A. Determination on the procedural defect assertion

The plaintiff asserts to the effect that the issuance of new shares in this case was made through a resolution of the board of directors held without due process of convening the board of directors. However, in full view of the overall purport of the arguments in the evidence Nos. 5 and 14, the defendant can be acknowledged that the defendant, pursuant to Article 37 of the articles of incorporation, notified each director and auditor one day before the board of directors to convene the board of directors and made a resolution on the issuance of new shares while five directors among the eight directors attend the board of directors. Thus, the above board of directors was legitimately convened, and there is no other evidence to acknowledge the plaintiff's assertion that the plaintiff did not go through legitimate procedure of convening the board

B. Determination on the assertion of defect in the content

In addition, the plaintiff asserts that the defect in the contents of the issuance of new shares in this case is so serious that it becomes null and void. According to the above facts, the defendant management allocated new shares to a friendly third party in order to defend the management right under the management dispute with the plaintiff. Such increase in the capital was urgent over two days, and the 4,160,000,000 won (1,00,000,000 + 2,222,000,000 won + the 938,000,000,000 won + the 160,000,000,000,000,000 won were invested in the above company's existing shares and the 3,99,99,190,190,3738,371,707, and 700,000,000 won were more or more for the purpose of the defendant's new shares issuance of new shares.

3. Conclusion

Thus, the plaintiff's claim of this case seeking confirmation of nullity of the issuance of new shares is justified, and it is so decided as per Disposition by the assent of all participating Justices.

Judges of the presiding judge, Yellowju

Judges' Cho Jae-ok

Revision of judges;