Applicant 1 and 20 others (Attorney Lee Dong-soo, Counsel for the plaintiff-appellant)

Two Industrial Development Co., Ltd. (Attorney Choi-soo et al., Counsel for the plaintiff-appellant)

Seoul Central District Court Order 2004 non-conforming151 dated November 3, 2005

1.The decision of the first instance shall be modified as follows:

The purchase price of shares issued by the principal of the case for which the applicant requests purchase shall be 5,823 won per share.

2. The total expenses shall be borne by each person.

1. Facts of recognition;

The record reveals the following facts.

A. On April 16, 2001, the principal of the case was a stock-listed corporation with the purpose of construction business and housing business, and since the Seoul Central District Court was ordered to commence corporate reorganization procedures, the company reorganization procedures are still in progress on January 10, 2004. On January 13, 2004, the representative director announced the merger plan with the two construction companies (hereinafter “dusan Construction”) at an interview with the representative of the trade union of the principal of the case on January 13, 2004.

B. Furthermore, on February 13, 2004, the principal of the case passed a resolution on the merger with the two Industrial Construction at the board of directors on February 13, 2004, and completed the merger registration on May 6, 2004 at the temporary general meeting of shareholders on March 26, 2004 (the trade name of the same day was changed from the “Korea Industrial Development Co., Ltd.” to the “Korea Industrial Development Co., Ltd.”).

C. The applicants are beneficial shareholders who deposited the shares of 495,511 shares listed in the separate sheet No. 2 issued by the principal of the case (hereinafter “instant shares”) with the Korea Securities Depository, and notified the principal of the instant case of opposing the resolution of the board of directors on February 13, 2004 before the above provisional shareholders’ meeting is held. The applicants filed a claim for purchase of shares by April 15, 2004, which is within 20 days from the date of the resolution of the provisional shareholders’ meeting.

D. Accordingly, the applicant and the principal of the case consulted on the purchase price of shares on April 23, 2004, but did not reach an agreement (On the other hand, including the applicant, the total number of shares held by the shareholders requesting the purchase of shares to the principal of the case against the merger is 4,335,366 shares, but the remaining shareholders except the applicant did not oppose the price presented by the principal of the case, and the purchase of shares was already completed).

2. Whether the motion of this case is legitimate

A. The case principal's assertion

The principal of this case is a listed corporation, and the applicant's exercise of appraisal rights should be subject to Article 191 of the Securities and Exchange Act. Article 191 (3) of the Securities and Exchange Act only provides three methods, such as consultation between the parties on the procedure for determining the purchase price of stocks, calculation by the market price calculated by the method as determined by the Presidential Decree, adjustment by the Financial Supervisory Commission, etc., and there is no legal basis that the court may seek a separate purchase price determination separately from the case. Thus, the application of this case, which was proposed to the court without undergoing

B. Determination

On the other hand, Article 191(3) of the Securities and Exchange Act provides that the procedure for determining the purchase price shall give priority to consultations between shareholders and the corporation concerned, and that the amount calculated by the method as determined by the Presidential Decree on the basis of the transaction price of the stocks concerned transacted on the securities market prior to the date of resolution of the board of directors in case where such consultation does not take place, and that the Financial Supervisory Commission may adjust the purchase price in case where the amount so calculated is in excess of 30/10 of the

However, since the above provision provides that "the Financial Supervisory Commission may adjust the purchase price", it cannot be deemed that adjustment by the Financial Supervisory Commission is necessary. Furthermore, denying the decision of the purchase price by the court despite that the above provision does not explicitly exclude the decision of the purchase price by the court, it would not infringe the right of claim for a trial as to the calculation of the purchase price by the opposing shareholder against the merger without any ground, and even minority shareholders whose number of shares for which a request for purchase was made is made is less than 30/100 even in light of the balance with the shareholders of the unlisted corporation who can make a request for the decision of purchase price, regardless of the difference of shares, shall also guarantee the decision of purchase price based on the court's final decision. Thus, shareholders who oppose the purchase price under the Securities and Exchange Act can apply for the decision of the direct purchase price

3. Determination of purchase price of stocks;

(a) Guidelines for determining the purchase price of stocks and basic date;

(1) Determination criteria

According to the proviso of Article 191(3) and Article 84-9(2) of the Securities and Exchange Act and Article 191(3) of the Enforcement Decree of the same Act and Article 84-9(2) of the same Act, where there is no agreement on purchase price between shareholders and the corporation concerned on the securities market, the shares which have been traded on the securities market shall be determined as purchase price. ① The average weighted average price of the daily closing price transacted on the securities market for the past two months from the date before the date of the resolution of the board of directors, ② the average weighted average price of the daily closing price transacted on the securities market for the past one month from the date of the resolution of the board of directors, ② the average weighted average price of the daily closing price transacted on the securities market for the past one week from the date of the resolution of the board of directors, ③ the average daily closing price on the securities market for the last one week from the date of the resolution of the board of directors,

Furthermore, in cases where shares are traded on the securities market, such as the shares in this case, the valuation of the value of shares based on the market value should be based on the purport of the provisions of the Enforcement Decree of the Securities and Exchange Act and the fact that shareholders are to invest in shares based on the price and information formed in the market. However, in cases where the market value is determined not to reflect the normal value of shares, fair valuation should be made by considering the net asset value, which is an important index indicating the objective value of shares

(2) Date of determination

In the case of a stock-listed corporation, the base date for calculating the purchase price of stocks shall be, in principle, prior to the date of the resolution of the board of directors which caused the appraisal right, in light of the purport of the proviso of Article 191(3) of the Securities and Exchange Act and Article 84-9(2)1 of the Enforcement Decree of the same Act. However, according to the records, on January 13, 2004, prior to the meeting of the board of directors for the merger with the representative of the union, the representative director of the principal of the case was announced in advance that the financial structure is scheduled for the merger with the two poor construction works. Since the fact that the stock price of the principal of the case was expressed after the notice of the scheduled merger as above shows a continuous decline in the stock market, the stock price of the principal of the case shall be determined on January 12, 2004, prior to the date of the resolution of the board of directors prior to the announcement of the merger plan.

(b) Elements for calculating the value of stocks according to various evaluation methods; and

(1) Market value;

According to the records, Article 84-9 (2) 2 of the Enforcement Decree of the Securities and Exchange Act shall apply mutatis mutandis mutatis mutandis to the daily closing price on the daily securities market which was published from January 12, 2004, which was the base date of calculation, and the weighted average price calculated by adding weight to the transaction volume on the daily securities market which was published in the past two months from January 12, 2004, and ② the weighted average price calculated by adding weight to the transaction volume on the daily securities market which was published in the past one month from January 12, 2004, and ③ the weighted average price calculated by calculating the daily closing price on the daily securities market transacted in the past one week from January 12, 2004, and ③ the market value per share of the instant shares is 2,593 won (2,575 +2,612+2,592)/3].

However, according to the records, it seems that the market value of the stock is lower than the normal value of the stock at the time when normal business is possible following the completion of the company reorganization procedure due to the relationship between April 16, 2001 and January 10, 2004 in which the principal of the case was under the company reorganization procedure. In full view of all the circumstances, such as the fact that the stock of the principal of the case was incorporated into the category subject to management on the securities market while the company reorganization procedure is in progress, and thus there was a somewhat limitation in the transaction of the stock, it is difficult to grasp the objective exchange value of the stock of this case with only the above market value, so the purchase price of the stock of this case shall be calculated by considering other factors such as net

(2) Net asset value

According to the records, as of January 12, 2004, the total number of shares issued by the principal of this case as of January 12, 2004 is 55,648,975 shares, and the net asset value is 503,839,259,319 shares. Thus, the net asset value per share of the shares calculated by dividing the net asset value by the total number of issued shares is 9,053 won (503,839,259, 319, 319/5, 648,975, 975).

(3) Profit value

According to the records, the non-party 1 and 2 of the first instance court evaluated profits value based on the estimated financial statements for the next two business years (204 and 2005) pursuant to Article 7 of the Enforcement Rule of the Regulations on Issuance and Public Disclosure of Securities. However, even if the company reorganization procedure is completed on January 10, 2004, it is difficult to reasonably estimate profits value per two separate business years by using Article 7 of the Enforcement Rule of the Regulations on Issuance of Securities and Public Disclosure if it is difficult to estimate profits per two separate business years because it is difficult to estimate profits per two separate business years because it is difficult to estimate profits per two separate business years due to the relationship in which it was actually impossible for the government-funded corporation and non-party 1 and non-party 2 of the first instance court to make it difficult to estimate profits per two separate business years because the estimated profits per two separate business years can be calculated based on the estimated profits per each of the above estimated profits per share if it would be difficult to estimate profits per two separate business years due to the above estimated profits per two different business years.

C. Purchase price of the shares of this case

(1) It is reasonable to determine the increase ratio of each element of stock value to a certain extent taking into account the company’s nature, business category, business status, and surrounding economic conditions. As seen above, it appears that the principal of the case was at the time of the reorganization procedure before the date of the announcement of the merger plan, and that the market value of the shares was lower than the normal value of the shares at the time of the implementation of the reorganization plan. The principal of the case was at the time of the bankruptcy on March 2, 2001 and at the time of the application for the reorganization plan on March 20, 201, it was assumed that there was no residual assets available to shareholders for distribution, which were at the time of the implementation of the reorganization plan on April 16, 201, after the reorganization plan was commenced for the principal of the case on 200 million won, the net asset value at the end of 200 million won was at the time of the implementation of the reorganization plan and at the end of 200 million won in consideration of the net asset value at the end of 20.

(2) Therefore, the purchase price of the instant shares shall be calculated by calculating the 5,823 won [2,593+2,93+23 won (2,59,053)/2] average of the net asset value per share of 2,593 won and 9,053 won per share as of January 12, 2004.

4. Conclusion

Therefore, the decision of the first instance court is unfair in conclusion, so it is decided as per Disposition by changing the purchase price of the shares issued by the principal of the case for which the applicant requests purchase to the amount of KRW 5,823 per share.

[Attachment]

Judges Rowing-wing (Presiding Judge) Human Rights