[1] Whether the imposition of a penalty surcharge is legitimate in a case where the imposition of a penalty surcharge under Article 206-11 of the former Securities and Exchange Act does not affect the imposition of a penalty surcharge on the grounds that the imposition of a penalty surcharge was based on multiple grounds for the imposition of a penalty surcharge, and the part of the grounds for

[2] In a case where the Securities and Futures Commission imposes a penalty surcharge on Company A for a violation of Article 186(1)13 of the Securities and Exchange Act and Article 190-2(2)1 of the same Act on the grounds that the Securities and Futures Commission violated the duty to report and disclose a listed corporation, etc., and Article 186(1)1 of the same Act and Article 190-2(2)1 of the same Act, which is a major act of basic penalty surcharge, based on the violation of the duty to report and disclose a listed corporation, etc., the case holding that it erred by misapprehending the legal principles in the judgment of the court below which revoked the entire disposition

[1] Articles 190-2 and 206-11 of the former Securities and Exchange Act (repealed by Article 2 of the Addenda to the Financial Investment Services and Capital Markets Act, Act No. 8635 of Aug. 3, 2007) / [2] Articles 186 (1) 13, 190-2, and 206-1 of the former Securities and Exchange Act (repealed by Article 2 of the Addenda to the Financial Investment Services and Capital Markets Act, Act No. 8635 of Aug. 3, 2007), Articles 83 (3) 8 and 84-8 (1) 5 of the former Enforcement Decree of the Financial Investment Services and Capital Markets Act (repealed by Article 2 of the Addenda to the Enforcement Decree of the Financial Investment Services and Capital Markets Act, Presidential Decree No. 20947 of Jul. 29, 2008)

LoenK Co., Ltd. (Law Firm D.L.S., Attorneys Lee Lee-soo et al., Counsel for the defendant-appellant)

Securities and Futures Commission

Seoul High Court Decision 2009Nu34671 decided June 25, 2010

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

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

A. The lower court determined that, based on its adopted evidence, in light of the circumstances indicated in its reasoning, it cannot be deemed that a contract entered into with the Plaintiff on April 21, 2006 with respect to the disposal of 30,600 shares of Twelter, Inc. (hereinafter “instant contract”), which was concluded between the Plaintiff on April 21, 2006, (i) and the International Broadcasting Corporation (hereinafter “In this case”), was repealed by Article 2 of the Addenda to the Financial Investment Services and Capital Markets Act (Act No. 8635 of Aug. 3, 2007; hereinafter “former Act”), Article 190-2(2)1 of the former Securities and Exchange Act, (ii) and Article 84-8(1)5 of the former Enforcement Decree of the Act (repealed by Presidential Decree No. 20947 of Jul. 29, 2008; hereinafter “former Enforcement Decree”), and (iii) provision on the issuance and public notice of securities under Article 208(3) of the former Securities Disclosure Act.

According to relevant statutes and records, the fact-finding and judgment of the court below are just, and there is no violation of the rules of evidence or misapprehension of legal principles as to "transfer of important assets" under Article 190-2 (2) 1 of the former Act as alleged in the grounds of appeal.

B. Even if the Plaintiff made a resolution by the board of directors on the transfer of shares above, this point does not constitute the grounds for disposition in this case, and it does not constitute an obvious and ex officio examination that the Defendant raised only in the final appeal. Thus, this part of the grounds for appeal cannot be a legitimate ground for appeal.

2. As to the remaining grounds of appeal

Even if some of the grounds for an administrative disposition are lawful, if the legitimacy of the disposition is recognized as the grounds for other dispositions, such disposition shall not be deemed unlawful (see Supreme Court Decisions 96Nu1184, May 9, 1997; 2003Du1264, Mar. 25, 2004; 2003Du1264, Mar. 25, 2004). In imposing a penalty surcharge pursuant to Article 206-11 of the former Act, even if the imposition of a penalty surcharge was conducted on the grounds of multiple grounds for the imposition, but some of the grounds for the imposition did not affect the imposition of the penalty surcharge, such disposition is not deemed unlawful.

According to the records, "standards for imposition of penalty surcharges" in subparagraph 3 of the attached Table 2 under Article 206-12 (4) of the former Act and Article 91 (6) of the former Enforcement Decree of the same Act (amended by Presidential Decree No. 2009-15, Jan. 28, 2009) provides for the imposition standards, etc. of penalty surcharges pursuant to Article 20-12 (4) of the same Act, and subparagraph 3 of the attached Table provides that "the amount of penalty surcharges for a violation of the former Act" shall be calculated first [the statutory imposition limit x basic imposition rate x the base imposition rate] x the grounds for reduction or exemption of penalty surcharges, and the act of violation falling under Article 206-11 (1) through (5) of the former Enforcement Decree of the same Act (including cases where financial statements of violation of Article 206-11 (3) of the Act affect the main sentence), and the act of violation of Article 8-18 (1) of the former Enforcement Decree of the same Act provides that "the plaintiff shall also submit a report and disclosure of the basic penalty surcharge."

Examining the above facts in light of the legal principles as seen earlier, there is room to view that the part of the Defendant’s violation of the duty to submit a report on the acquisition of assets, which constitutes one of the grounds for disposition of this case, does not affect the disposition of this case, such as the amount of penalty surcharge. Thus, even if the violation of the duty to submit a report on the acquisition of assets is unlawful, it cannot be said that the disposition of this case is unlawful as a matter

Nevertheless, the court below revoked the entire disposition of this case immediately on the ground that, without examining whether the part of the disposition disposition of this case, which is an illegal disposition, affected the disposition of this case, was affected by the disposition of this case, and even if the penalty surcharge of the same amount is calculated only by the remaining violation except for the part of the violation against which the duty to report the acquisition of assets is to be submitted, the defendant must exclude the part of the violation against which the duty to report the acquisition of assets should be submitted to the plaintiff from the ground of disposition and only a justifiable reason should be imposed as a new disposition. Such judgment of the court below erred by misapprehending the legal principles on the revocation of administrative disposition, which affected the conclusion of the judgment

3. Conclusion

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

Justices Lee In-bok (Presiding Justice)