The purpose of Article 46 (2) of the Regulations on the Operation of Small and Medium Enterprise Establishment Support Services based on the provisions of Article 16-3 of the former Small and Medium Enterprise Establishment Support Act is that the executive partner of the investment association shall not offer the property of the investment association as security, and the legal nature of the above provisions (=Control Regulations

The purpose of Article 46 (2) of the former Support for Small and Medium Enterprise Establishment Act (amended by Act No. 6194 of Jan. 21, 200) provides that "the executive partner of an investment association shall not offer the property of the investment association as a security," which is based on the provisions of Article 16-3 of the former Support for Small and Medium Enterprise Establishment Act (amended by Act No. 6194 of Jan. 21, 200) is that the executive partner of the investment association shall not provide the property of the investment association. However, the fund management of the executive partner of the investment association is originally entrusted to autonomous judgment. However, the public nature that the investment association aims to promote the development of small and medium enterprises by supporting the establishment of a small and medium enterprises and the social nature of the investment association to promote the sound investment, thereby contributing to the establishment of a sound industrial structure by promoting the investment association's interests and promoting sound investment. It cannot be said that the act in violation of the above provision has significantly anti-sociality and morality to the extent that it does not deny its judicial effect.

Article 16-3 (see current Article 30) of the former Support for Small and Medium Enterprise Establishment Act (amended by Act No. 6194, Jan. 21, 2000); Article 46(2) of the Regulations on the Operation of Small and Medium Enterprise Establishment; Article 105 of the Civil Act

Sungwon Investment Association 3 (Law Firm Han Law, Attorneys Sung-min et al., Counsel for the plaintiff-appellant)

Han-gu Startup Investment Association (Law Firm Sejong, Attorneys Cho Young-young et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2001Na7409 delivered on June 15, 2001

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

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below acknowledged that the defendant, a small and medium enterprise establishment investment association established under the former Support for Small and Medium Enterprise Establishment Act (wholly amended by Act No. 6194 of Jan. 21, 200; hereinafter referred to as the "former Establishment Support Act"), based on the adopted evidence, acquired bearer convertible bonds of KRW 2 billion issued by the Asian Network Corporation (hereinafter referred to as the "investment association") on April 3, 1996, the plaintiff, an investment association, provided the defendant with bearer convertible bonds of KRW 2 billion which he acquired from the Han JinT Corporation, as security transfer. Since it was impossible for the plaintiff to pay the above convertible bonds to the defendant due to its default, the defendant's obligation to pay the principal and interest of the above convertible bonds to pay the above convertible bonds to the defendant for repayment of principal and interest on the defendant's investment association, the defendant's act of violating the provisions of Article 16-3 of the former Establishment Support Act, which prohibit the defendant from returning the above convertible bonds to the plaintiff's investment company's investment company's investment company's investment company's.

2. However, the purport of Article 46 (2) of the above Regulation on the Operation of Support for Small and Medium Enterprise Establishment based on the provisions of Article 16-3 of the former Act is that the executive partner of an investment association cannot provide the property of the investment association as a security. The purpose of the above provision is that the management of the funds of the executive partner of the investment association is entrusted to autonomous judgment. However, the public nature that the investment association aims to promote the development of small and medium enterprises by supporting the establishment of a small and medium enterprises, and because of social nature, it is trying to contribute to the construction of a sound industrial structure by promoting the interests of the investment partners and promoting sound investment. The act of offering security in violation of the above provision cannot be deemed to have significantly anti-social and anti-divity to the extent that it should not be denied even if it does not deny the legal effect of the act. Thus, the above provision is not only a regulation that restricts the executive partner's ability to act, but also it does not affect the legal effect of the above act even if it violated the provisions in private law.

Nevertheless, the court below's determination that this case's transfer of security agreement was null and void by denying the legal effect of the act of offering security in violation of Article 46 (2) of the above Regulation on the Operation of Small and Medium Enterprise Establishment Support Business Act was erroneous in the misunderstanding of legal principles as to the nature of the above operation provision,

3. Therefore, the judgment of the court below is reversed without examining the remaining grounds of appeal, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-in (Presiding Justice)