[1] The meaning of "a case where an oligopolistic shareholder has caused poor results by exercising his/her influence on management," which is liable for joint repayment for the debts related to the deposit, etc. of a credit cooperative under the former Mutual Savings and Finance Act

[2] The case holding that, in order to maintain the soundness of the mutual savings and finance company which is a subsidiary company, the parent company's act of approving business plans, requesting measures for management improvement, dispatching employees, etc. conducted by the parent company which is a financial institution for business guidance cannot be deemed as participating in poor management of the above

[1] Where an oligopolistic stockholder under Article 39(2) of the Framework Act on National Taxes has exercised influence over the management of a mutual savings and finance company and has caused fraudulent results, he/she shall be jointly and severally liable with a mutual savings and finance company for the obligations related to deposits, etc. of a mutual savings and finance company under Article 37-3(1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429 of March 28, 2001). Thus, where an oligopolistic stockholder has caused fraudulent results by exercising his/her influence over the management of a mutual savings and finance company, it refers to cases where an oligopolistic stockholder is directly and indirectly involved in the insolvency of a mutual savings and finance company

[2] The case holding that, in order to maintain the soundness of the mutual savings and finance company which is a subsidiary company, the parent company's act of approving business plans, requesting measures for management improvement, dispatching employees, etc. conducted by the parent company which is a financial institution for business guidance cannot be deemed as participating in the insolvency management of the above

[1] Article 37-3 (1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429 of March 28, 2001) (see current Article 37-3 (2) of the Mutual Savings and Finance Company Act) / [2] Article 37-3 (1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429 of March 28, 2001) (see current Article 37-3 (2) of the Mutual Savings Banks Act)

Korea Deposit Insurance Corporation (Law Firm Seocheon, Attorneys Yu-min et al., Counsel for the plaintiff-appellant)

Busan Bank Co., Ltd. (Law Firm Jeong, Attorneys Yellow-soo et al., Counsel for the plaintiff-appellant)

Pakistan Co., Ltd. (Law Firm Gyeong, Attorneys Jeong Jeong-sung et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2003Na14111 delivered on August 29, 2003

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

Where an oligopolistic stockholder under Article 39(2) of the Framework Act on National Taxes has exercised influence on the management of a mutual savings bank (the name has been changed to a mutual savings bank under the Act amended by Act No. 6429, Mar. 28, 2001) and has caused fraudulent consequences, he/she shall be jointly and severally liable with the mutual savings bank for the obligations related to the deposit, etc. of a mutual savings bank under Article 37-3(1) of the former Mutual Savings and Finance Company Act (amended by Act No. 6429, Mar. 28, 2001). The case where an oligopolistic stockholder has caused fraudulent consequences by exercising his/her influence on management means the case where an oligopolistic stockholder is directly and indirectly involved in the poor management of a mutual savings bank by using his/her influence and has caused the insolvency of a mutual savings bank.

According to the records, the defendant, as an oligopolistic stockholder of the non-party future credit safe company (hereinafter referred to as the "former credit safe"), demanded the future credit safe to submit revised business plans and budget compilation reflecting the number of persons voluntarily retired on August 20, 1997. On September 19, 1997, the defendant reviewed the revised business plan of future credit safe, and requested re-consultation of the business plan considering the current net income available for dividends through the revision of bad debt depreciation plan. On September 18, 1997, the defendant requested the future credit safe to submit improvement measures for three years. The cost reduction plan should be considered as feasible. The fixed loans in arrears are not feasible and specific plans should be established, and the defendant's act of collecting and supervising the company's future financial status should be thoroughly analyzed the results of each quarter of implementation plan and the factors that fall short of the plan, and the defendant's act of collecting and notifying the future credit safe's future management performance should be reported to the Governor of the Financial Supervisory Service's future financial institution's management performance.

The court below rejected the plaintiff's claim of this case against the defendant under Article 37-3 (1) of the former Mutual Savings and Finance Company Act on the ground that it is not sufficient for the defendant to exercise influence over the future treasury's management due to the fact that the defendant received approval of the annual budget compilation, personnel management, management audit, and quarterly management performance report to the future treasury, that the defendant's officer and employee was appointed respectively to the executive director of the future treasury and the auditor of the future treasury, that the defendant deposited subordinated deposits to the future treasury at a point beyond the status of oligopolistic shareholders due to stock transfer, or received business reports from the future treasury as part of the management affairs of other subsidiaries, and that there is a lack of causation between the defendant's exercise of influence over the future treasury's management and the failure of the future treasury's management due to the fact that the defendant did not have any duty to return deposits under Article 37-3 (1) of the former Mutual Savings and Finance Company Act, but it is hard to see that the court below erred in the misapprehension of legal principles as to oligopolistic shareholders' obligations after the transfer of stocks.

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

Justices Lee Hong-hoon (Presiding Justice)