Plaintiff (Attorney Choi Sung-jin, Counsel for the plaintiff-appellant)

Mchemical Co., Ltd. (Attorneys Ansan Jae-de et al., Counsel for the plaintiff-appellant)

August 19, 2016

1. The plaintiff's claim is dismissed.

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

From 7 days after the delivery date of the judgment of this case to 30 days after the public holidays, the defendant or his agent shall allow the plaintiff or his agent to peruse, copy (including photographing photographs and copying of accounting data files) the books and documents listed in the separate sheet from 09:00 to 18:00 each day within the office of the head office of the defendant company. The plaintiff and his agent may be accompanied by a lawyer, a certified tax accountant, or other assistant when conducting the above perusal and copying. When the defendant violated each of the above matters, the defendant shall pay to the plaintiff KRW 10,00,000 per day.

1. Basic facts

A. Status of the parties

1) The defendant is a company mainly engaged in the manufacture of concrete mixtures and wholesale and retail business. The plaintiff holds at least 10,000 shares of the defendant's total 482,00 shares, which correspond to at least 3/100 of shares issued by the defendant.

2) The Plaintiff was appointed as the Defendant’s auditor on March 25, 2010, and retired on January 20, 2013.

B. Plaintiff’s request for inspection and copying of the account books, etc.

1) On October 30, 2013, the Plaintiff asserted that he/she had the rights and obligations as an auditor because the latter auditor was not appointed on his/her own, and provided an advance notice of audit to the Defendant. On the other hand, from January 1, 2010 to October 31, 2013, the Plaintiff sent the minutes of the general meeting of shareholders from October 31, 2013, the minutes of the board of directors’ meeting, the minutes of the board of directors’ meeting, and the details of passbook transactions, etc. during the said period to November 4, 2013. However, the Defendant failed to comply therewith, and the Plaintiff urged the Plaintiff to comply with the said request three times during the period from November 5, 2013 to November 15, 2013, but the Defendant failed to comply

2) On November 21, 2013, the Plaintiff filed an application against the Defendant for the perusal of the books and documents of the Defendant’s account and for provisional disposition of copying, against the Defendant on this Court No. 2013Kahap154.

3) On December 4, 2013, the Defendant notified the Plaintiff that “from December 10, 2013 to 09:00 to 15:00, the Defendant would allow the Defendant to peruse and copy the Defendant’s accounting books, etc. at the Defendant’s representative director’s office.” In fact, on December 10, 2013, the Defendant took measures to allow the Defendant’s representative director to peruse and copy the Defendant’s accounting books, etc. at the Defendant’s office, but the Plaintiff did not peruse and copy the said accounting books, etc. on the above date presented by the Defendant.

4) On January 21, 2014 in the instant provisional disposition case, the Plaintiff’s application for provisional disposition was dismissed on the grounds that “the Defendant allowed the Plaintiff to peruse and copy the accounting books, etc. as above, but the Plaintiff did not peruse and copy it, and the account books and documents that the Plaintiff intended to peruse and copy were too broad.” The Plaintiff appealed against the said decision of dismissal, but the appeal was dismissed on August 26, 2015.

C. Plaintiff’s appraisal right

1) On December 4, 2015, the Defendant, including the Plaintiff, planned to waive the manufacturing industry and convert the Defendant into a sales corporation, and accordingly, planned to transfer the land of the Defendant Company, the site of the Defendant Company, the factory facilities, and the factory buildings of the fourth floor of Alca Cyp Gabp Gabp Gabro (hereinafter “each of the instant real estate”) on the said land. On December 18, 2015, the Defendant sent a notice to convene a temporary general meeting of shareholders on the agenda of the transfer of each of the instant real estate.

2) On December 15, 2015, the Plaintiff sent a content-certified mail to the Defendant that the Plaintiff opposed to the transfer of each of the instant real estate.

3) On December 18, 2015, the Defendant’s temporary shareholders’ meeting was held as the agenda of the transfer of each of the instant real property. At the above temporary shareholders’ meeting, the shareholders holding more than 2/3 of the Defendant’s total shares issued at 482,000 shares, who held more than 2/3 of the Defendant’s total shares issued at the above temporary shareholders’ meeting, passed the above agenda with the approval

4) On December 23, 2015, the Plaintiff sent a content-certified mail stating that “The Plaintiff notified the Defendant that he/she would object to the transfer of each of the instant real estate, and thus, requested the purchase of KRW 100,000 shares of the Defendant’s common shares owned by the Plaintiff.”

5) On December 29, 2015, with respect to each of the instant real estate, the registration of ownership transfer was completed from the Defendant on December 29, 2015, for the non-party company’s trade (the transaction price of KRW 3.8 billion) on December 29, 2015.

6) On January 25, 2016, the Plaintiff filed an application with the Defendant for the determination of the purchase price of the Plaintiff’s shares (hereinafter “the instant non-contentious case”) pursuant to the Seoul Central District Court Decision 2016Gahap2000, and on February 29, 2016, filed a lawsuit against the Defendant seeking payment of the purchase price of the Plaintiff’s shares (hereinafter “the instant lawsuit”).

【Reason for Recognition】 Each description of evidence Nos. 1, 2, 4, 5, 6, 7, 9, 32, 33, 34, 35, 39, 48, 49, 51, and evidence Nos. 1 and 5 (including Serial numbers; hereinafter the same shall apply), and the purport of the whole facts and arguments in this court

2. The parties' assertion

A. The plaintiff

1) On February 18, 2001, the Plaintiff operated the Defendant with Nonparty 1 and Nonparty 2 (hereinafter “Nonindicted 1, etc.”) as a partnership business, and decided to handle matters concerning the Defendant’s operation with the Plaintiff’s approval. The Plaintiff agreed to receive reports on the Defendant’s accounting-related documents, loan fluctuations, transactional transactions, and production performance. However, from January 2009, Nonparty 1, etc. did not inform the Plaintiff of the Defendant’s accounting contents.

2) From 2010 to 2013, the Defendant is doubtful that ○○○○○ operated by Nonparty 2, Nonparty 6, Nonparty 2’s early 2013, by using the transaction partner ○○○○○○, such as paying an amount of money equivalent to KRW 848 million, under the name of “sale commission”. Meanwhile, even if the value of each of the instant real property exceeds KRW 6 billion, the Defendant sold each of the instant real property to Nonparty 2, the Defendant sold the instant real property to Nonparty 3.8 billion.

3) Nonparty 1, etc. infringe upon the interests of shareholders by way of the aforementioned diverse methods. Accordingly, the Plaintiff seeks to devise a claim for damages against the Defendant’s officers in order to protect the interests of the shareholders as minority shareholders, and sought perusal and copying of the account books and documents of the Defendant pursuant to Article 466 of the Commercial Act. However, the Plaintiff, while the instant lawsuit is pending, requested for appraisal of the shares held by the Plaintiff. As such, the scope of perusal and copying is limited to the scope necessary for calculating the purchase price of the Plaintiff’s shares as indicated in the attached Form. In order to ensure that the Defendant refuses perusal and copying, the Plaintiff is entitled to pay the enforcement fine of KRW 10 million per day.

B. Defendant

1) As the Plaintiff exercised appraisal rights against the Defendant’s transfer of each of the instant real estate, the Plaintiff is no longer the Defendant’s shareholder, and thus, there is no standing to seek perusal or reproduction of accounting books and documents against the Defendant.

2) The Plaintiff may achieve the purpose of the instant lawsuit by filing an application for appraisal for calculating the purchase price of shares in the instant non-litigation case, but the instant case is intended to collect data necessary for the Defendant’s business secret outflow, obstruction of business and other litigation cases without filing an application for appraisal. As such, the Plaintiff’s claim constitutes abuse of rights.

3. Determination

A. Determination as to the defendant's defense prior to the merits

The Plaintiff’s temporary shareholders’ meeting was held in front of the Defendant’s temporary shareholders’ meeting as the subject matter of the transfer of each real estate of this case and expressed the Defendant’s intent to oppose the transfer of each real estate of this case at the above temporary shareholders’ meeting, and thereafter, each of the real estate of this case was sold to the Nonparty Company, and the Plaintiff’s exercise of appraisal right against the Defendant’s 100,000 shares held by the Plaintiff against the Defendant. As seen earlier, since the Plaintiff’s exercise of appraisal right is justifiable, the Plaintiff and the Defendant’s exercise of appraisal right against the Defendant, thereby concluding a sales contract against the Defendant’s 10,000 shares held by the Plaintiff. However, even if the purchase contract was concluded between the Plaintiff and the Defendant as above, as long as the Defendant did not pay the Plaintiff the purchase price to the Plaintiff, it still constitutes the Plaintiff’s ownership of the above 100,000 shares, and the Defendant did not have any dispute between the parties, and thus, the Plaintiff is in the status of shareholders holding the Defendant

B. Judgment on the merits

1) Where a request for inspection or copying of accounting books and documents prescribed under Article 466(1) of the Commercial Act is made, the company may refuse such request by proving that such request is unreasonable. However, where a shareholder’s exercise of a shareholder’s right to inspection or copying interferes with the management of the company’s business or shareholders’ common interest, or where a shareholder is likely to use the acquired information in light of the company’s competitive business, or where a shareholder exercises a shareholder’s right to inspection or copying at an excessively unfavorable time in favor of the company, it shall be deemed unfair upon fulfilling the justifiable purpose (see Supreme Court Order 2003Ma1575, Dec. 24, 200

2) In light of the following circumstances that can be seen by adding up Nonparty 7’s testimony and the purport of the entire pleadings to the above basic facts, it is difficult to view that the Plaintiff’s seeking perusal and copying of the books and documents recorded separately against the Defendant is justifiable.

① According to the content certification (Evidence A) sent by the Plaintiff to the Defendant on October 30, 2013, the Plaintiff appears to have requested the Defendant to allow the perusal and copying of the account book in order to accomplish the above demand while demanding the Defendant to pay the money lent to Nonparty 1, etc. to the Defendant after commencing the operation of the business as a partner and the remuneration for the performance of his duties as the Defendant’s auditor. Meanwhile, the Plaintiff appears to have not demanded the perusal and copying of the account book in the position of shareholder and auditor before sending the above content certification. In light of this, the first demand of the Plaintiff for the perusal and copying of the account book was not to protect the interests of the Defendant Company’s management monitoring or shareholder, not to protect the interests of the Plaintiff as a partner, but to receive remuneration for the performance of duties as an auditor.

② When the Plaintiff applied for a provisional disposition seeking perusal and copying of the accounting books against the Defendant, the Defendant notified the Defendant’s representative director’s office of December 10, 2013 that “to allow the Plaintiff to peruse and copy the Defendant’s accounting books, etc.” and took measures to allow the Plaintiff to peruse and copy the Defendant’s accounting books on the actual date. However, the Plaintiff did not peruse or copy the Defendant’s accounting books or documents on the above date.

On December 10, 2013, the Plaintiff asserted to the effect that the part required by the Plaintiff among the accounting books and documents of the Defendant could not be sufficiently perused or copied, and thus, the Plaintiff did not peruse or copy them on the above day. However, as alleged by the Plaintiff, even if it is impossible to peruse or copy all the accounting books and documents required by the Plaintiff only on the day designated by the Defendant, the Plaintiff, as the first day, may peruse or copy all the accounting books and documents provided by the Defendant on the above day, and if the above day alone is insufficient, may demand additional perusal or copy by the Defendant. However, the Plaintiff did not do so, but did not peruse or copy the Defendant’s accounting books and documents on the above day designated by the Defendant.

(3) Even in cases where shareholders of a stock company exercise their appraisal rights against a stock company, they shall be held as shareholders, and therefore, they shall be entitled to exercise their rights as shareholders, in principle, against the stock company: Provided, That in cases where the shareholders of a stock company apply for a determination of purchase price of stocks to a court because they did not reach an agreement on the purchase price of stocks after exercising their appraisal rights against the stock company, it shall be reasonable to view that the shareholders’ rights as shareholders, in principle, may be exercised to the

As seen earlier, the Plaintiff had exercised the appraisal right against the Defendant during the proceeding of the instant lawsuit, and filed an application with the Defendant for determination of the purchase price of shares to the instant court in order to not reach an agreement with the Defendant on the purchase price of shares. It is anticipated that the appraisal procedure for calculating the appropriate value of the shares requested by the Plaintiff in the instant non-contentious case following the said application would be necessary. Meanwhile, the Defendant’s account books and documents necessary for calculating the value of shares in the said appraisal procedure would be submitted. However, without filing an application for appraisal for calculating the value of shares in the instant non-contentious case, the Plaintiff asserted that the account books and documents recorded in the instant case are account books and documents necessary for calculating the value of shares and sought perusal

3) Therefore, the Plaintiff’s claim for inspection and copying of account books and documents is without merit, and the Plaintiff’s claim for the enforcement fine premised on the legitimacy of the above request for inspection and copying also is without merit.

4. Conclusion

Therefore, all of the claims of this case are dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Park Hun-bok (Presiding Judge) Hun-sung (Presiding Judge)