[1] In case where new shares issued by another corporation are acquired at par value, whether it should be determined whether the new shares issued by another corporation are subject to denial of unfair practices (affirmative)

[2] The case holding that the acquisition of new shares at par value is subject to avoidance of wrongful calculation even though the market price of the shares issued by a person with a special relationship falls short of par value

[3] The market price of the shares to be the basis for calculating the denied amount of wrongful calculation due to the high-priced acquisition of new shares (=the value of shares immediately after the increase payment)

[1] The legal nature of the acquisition of new shares is acknowledged as a membership contract aimed at the occurrence of membership relationship under the Commercial Act, and even if the acquisition of new shares is to be inevitable at its par value when it is intended to acquire new shares because of the strict restriction on the issuance of new shares under Article 417 of the Commercial Act, it shall be subject to the high-priced purchase that is subject to avoidance of unfair conduct by comparing the difference between the legitimate evaluation value of new shares through the appraisal of assets of the issuing company at the time of issuance of new shares and the acquisition value of new shares with the appraisal of assets.

[2] The case holding that the acquisition of new shares at par value is an abnormal transaction that disregards economic rationality in light of sound social norms or commercial practice even though the market price of the shares issued by a person with a special relationship falls short of face value

[3] Unlike the purchase of general assets whose value is determined at the time of acquisition, considering that the purchaser’s acquisition of new stocks due to changes in the market value of the issuing corporation’s stocks per se due to the payment of the price of the relevant stocks, the market value of the stocks, which is the basis for calculating the denied amount of unfair calculation due to the high-priced acquisition of new stocks, is the value of the stocks immediately after the payment of the capital increase

[1] Article 417 of the Commercial Act, Article 20 of the former Corporate Tax Act (amended by Presidential Decree No. 5581 of Dec. 28, 1998) (see Article 52 of the current Enforcement Decree of the Corporate Tax Act), Article 46(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998) (see Article 88(1) of the current Enforcement Decree of the Corporate Tax Act), Article 417 of the Commercial Act, Article 20 of the former Corporate Tax Act (amended by Presidential Decree No. 5581 of Dec. 28, 1998) (see Article 52 of the current Enforcement Decree of the Corporate Tax Act), Article 46(2)4 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 198) (see Article 88(1)1 of the current Enforcement Decree of the Corporate Tax Act), Article 418(1) of the former Corporate Tax Act (amended by Presidential Decree No. 258. 198. 198.

[1] Supreme Court Decision 88Nu7255 decided Dec. 22, 1989 (Gong1990, 376)

S&T Co., Ltd. (Law Firm S&S, Attorneys Ha Chang-soo et al., Counsel for the plaintiff-appellant)

Head of Yeongdeungpo Tax Office

Seoul High Court Decision 2001Nu13296 delivered on July 4, 2002

The judgment below is reversed and the case is remanded to Seoul High Court.

1. Regarding ground of appeal No. 1

Although the legal nature of the acquisition of new shares is recognized as a membership contract aimed at the occurrence of employee relations under the Commercial Act, and it is difficult to accept new shares at its par value when it intends to acquire new shares because of the strict limitation on the issuance of new shares under the provisions of Article 417 of the Commercial Act, the acquisition of new shares by a tax accounting firm constitutes the purchase of investment assets, and thus, it shall be subject to the high-priced purchase that is subject to avoidance of unfair practices by comparing the difference between the legitimate evaluation value of new shares by the appraisal of assets status of the issuing company at the time of issuance of new shares and the acquisition value of new shares (see Supreme Court Decision 88Nu7255 delivered on December 22, 19

In the same purport, the court below is just in holding that capital transactions, such as new stocks, etc., affect income amount as well as profit and loss transactions, where such acts fall under the category of transaction by wrongful calculation or where a corporation's profit is distributed as a corresponding act or calculation, it shall be subject to avoidance. There is no error in the misapprehension of legal principles as to the subject of avoidance by wrongful calculation, as otherwise

2. Regarding ground of appeal No. 2

According to the reasoning of the judgment below, the court below acknowledged the facts as follows. ① Cmph Coph Co., Ltd. (hereinafter referred to as "non-party company") in the position of the plaintiff and a person related to the non-party company (hereinafter referred to as "non-party company") transferred the value of the non-party company's stocks to the non-party company as zero won and calculated the total value of the acquisition value of the new stocks to the non-party company as price reduction of 2% of the acquisition value, and calculated the above amount of loss of the investment stocks to be added to deductible expenses, ③ the plaintiff and the non-party company contributed to 30% or more of the total number of the issued stocks to the non-party company or its family members as the non-party company's related party with a special relationship with the non-party company without any special circumstance, in light of the following facts:

In light of the relevant legal provisions and records, the above recognition and judgment of the court below is just and there is no violation of the rules of evidence or misapprehension of legal principles as to the economic rationality, as otherwise alleged in the ground of appeal.

3. Regarding ground of appeal No. 3

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in the judgment below, and held that the market price of the non-party company's stocks, which serves as the basis for calculating the denied amount, should be deemed not to be the value immediately before the increase in the capital, but the market price of the non-party company's stocks, which is the basis for calculating the denied amount, should be deemed to be the value immediately after the increase in the capital, so in the case of the second increase in the capital of this case, the plaintiff's assertion that the denied amount should be calculated on the basis of the difference between the market price of the non-party company's stocks increased immediately after the payment by the plaintiff of the purchase price of new stocks and the acceptance price of the non-party company for the second increase in the capital of this case, on the ground that the rejection of unfair calculation is not likely to occur after the time of the

However, unlike the purchase of general assets whose value is determined at the time of acquisition, considering the fact that the purchaser of new stocks acquires new stocks as a result of a change in the market value of the issuing corporation’s stocks by itself due to the payment of the price of the relevant stocks, the market value of the stocks, which serves as the basis for calculating the denied amount of unfair calculation due to the high-priced acquisition of new stocks, shall be deemed to be the value of

Therefore, the court below should have denied the difference between the value of new shares and the value of the non-party company immediately after the plaintiff paid the new shares. However, the court below calculated the denied amount based on 00 won, which is the value of the shares immediately before the acquisition of new shares. The judgment below is erroneous in the misapprehension of legal principles as to the scope of avoidance of wrongful calculation. The plaintiff'

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion, and it is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Han-gu (Presiding Justice)