[1] Where a shareholder who objects to a merger or business transfer of a company requests the company to purchase unlisted stocks, the method of calculating the purchase price

[2] Where determining the purchase price of unlisted stocks according to the exercise of appraisal right by a shareholder opposing a transfer of business, etc., the method of calculating the profit value and the profit value in determining the purchase price may not be considered

[3] The method of determining the ratio of reflection in a case where the sales price of unlisted stocks is calculated by comprehensively reflecting market value, net asset value, earnings value, etc.

[1] In a case where a shareholder opposing the merger or transfer of business of a company requests the purchase of unlisted stocks with respect to the company, such transaction price shall be deemed to be the market price and the purchase price of the stocks shall be determined. However, if there are no such transaction cases, various methods such as market value methods generally recognized as to the appraisal of unlisted stocks, net asset value methods, and profit-value methods, etc. However, since the relevant laws and regulations governing the appraisal method of unlisted stocks apply different standards according to their legislative purposes, it cannot be concluded that any one method of appraisal (e.g., the method of appraisal under Article 84-7 (1) 2 of the Enforcement Decree of the Securities and Exchange Act, or the method of appraisal under Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act) shall not be applied at all times, and a fair price shall be determined by taking into account the company’s situation or the characteristics of the business type. Meanwhile, even if an objective exchange value of unlisted stocks reflects the objective exchange value as to the unlisted stocks, the fair price of the stocks can be determined only by the transaction price.

[2] Where determining the purchase price of unlisted stocks by a shareholder opposing a transfer of business, etc., barring special circumstances, the value of stocks shall be determined at the time prior to being affected by the transfer of business, etc., and the profit value shall be determined by taking into account the estimated profit, etc. that may arise in the future in the relevant case. However, in a case where no objective data is submitted to calculate future profit value in the relevant case, or where the profit value is closely related to other evaluation methods, and it is not necessary to reflect it as a separate independent calculation factor, the profit value shall not be considered in calculating the purchase price

[3] In a case where the sales price of unlisted stocks is calculated by comprehensively reflecting market value, net asset value, profit value, etc., the reflection ratio should be determined by considering all the circumstances, such as the situation of the company in question, characteristics of the business type, appropriateness of individual evaluation factors, etc.

[1] Articles 374-2(5) and 530 of the Commercial Act; Article 84-7(1)2 of the Enforcement Decree of the Securities and Exchange Act; Article 36-12(3) and (5) of the Enforcement Decree of the Securities and Exchange Act; Article 63(1)1(c) of the Inheritance Tax and Gift Tax Act; Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act / [2] Articles 374-2(5) and 530 of the Commercial Act; Article 84-7(1)2 of the Enforcement Decree of the Securities and Exchange Act; Article 36-12(3) and (5) of the Securities and Exchange Act; Article 63(1)1(c) of the Enforcement Rule of the Inheritance Tax and Gift Tax Act; Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act / [3] Articles 374-2(5) and 530 of the Commercial Act; Article 84-7(1)2)2 of the Enforcement Decree of the Securities and Exchange Act; Article 36(1)3)4(c)

[1] [3] Supreme Court Order 2004Ma1022 Decided November 24, 2006 (Gong2007Sang, 47) / [1] Supreme Court Decision 2005Do856 Decided April 29, 2005 (Gong2005Sang, 902) Supreme Court Decision 2003Da69638 Decided October 28, 2005 (Gong2005Ha, 1847)

Suwon Electronic Co., Ltd. (Law Firm Squa, Attorneys Im Sung-woo et al., Counsel for the plaintiff-appellant)

Other 1 and 74 others

Seoul High Court Order 2005Ra37, 38, 39, 40, 41, 42, 43, 44, 167 dated August 11, 2005

All reappeals are dismissed.

The grounds of reappeal are examined.

1. Where a shareholder opposing the merger or transfer of business of a company requests the purchase of unlisted stocks with respect to the company, the transaction price of the company shall be deemed to be the market price and the purchase price of the stocks shall be determined. However, if there are no such transaction cases, the relevant laws and regulations governing the appraisal method of unlisted stocks apply different standards according to the purpose of its enactment. Thus, one method of evaluation (e.g., the method of evaluation under Article 84-7 (1) 2 of the Enforcement Decree of the Securities and Exchange Act or the method of evaluation under Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act) cannot be determined at all times, and fair price shall be determined by comprehensively taking into account the company’s situation or the characteristics of the business (see, e.g., Supreme Court Decisions 2005Do856, Apr. 29, 2005; 2003Da6938, Oct. 28, 2005).

On the other hand, even if there exists a normal transaction example that properly reflects the objective exchange value with respect to unlisted stocks, in cases where it is difficult to determine the price of unlisted stocks as the price of unlisted stocks only based on the above transaction price in light of the transaction period, the circumstances of the transaction, the internal situation of the company after the transaction, the change in management status, and the distance between the price calculated based on other evaluation methods, etc., the aforementioned transaction price or the price adjusted according to reasonable standards may be

The court below found that during the 15-day delisting period from March 22, 2002 to April 12, 2002 after the delisting shares of the Principal Treatment Electronic Co., Ltd. (hereinafter “Treatment Electronic Co., Ltd.”) were traded continuously while maintaining the average trading price of 408 won, and that there was no special factor that would affect the stock price of the Treatment Electronic Co., Ltd. from April 13, 2002 until the resolution of the board of directors regarding the transfer of the business of this case was issued after April 13, 2002. The calculation of the purchase price of the stocks of this case as of September 29, 2002, as of September 29, 2002, reflected as an element to calculate the stock price of the average trading price of 408 won which was formed five months before the date of the resolution of the transfer of the business of this case. There is no error in the misapprehension of legal principles as to the market value in calculating the stock purchase price of non-listed stocks.

2. Where determining the purchase price of stocks by the stockholders opposing the transfer of business, etc., the profit value shall be determined as of the time before the stocks are affected by the transfer of business, etc. except in extenuating circumstances, and in such cases, the profit value shall be calculated by taking into consideration the estimated profit, etc. to be generated in

Therefore, in the court below, it is inappropriate to consider the profit value of the stock in calculating the stock purchase price of this case on the grounds that it is difficult to continue to operate the business in the future by transferring all the assets of the business sector that can calculate the profit through the transfer of the business of this case to Daewoo Industries Co., Ltd. (hereinafter “Treatment Bosch Rexroth”).

However, in the relevant case, there is no objective data to calculate the future profit value, or if it is not necessary to reflect the profit value as a separate independent calculation factor because the profit value is closely related to the elements by other evaluation methods, it shall not be considered in calculating the profit value in calculating the profit value. According to the records, there is no objective data to calculate the future profit value, such as the estimated financial statements of treatment electronic company, and there is no objective data to calculate the profit value in the future, and even though treatment electronic company paid approximately KRW 350 billion due to the increase of profit and profit through the structural improvement of management, it is recognized that the overall profit and loss has no choice but to become the deficit. In light of these circumstances, in this case, the profit value of treatment electronic stocks was in a relationship that is difficult to increase without the net asset value increase, and thus, it is reasonable to accept only the net asset value, without reflecting it as the net asset value separate from the net asset value, and thus, it is not reasonable to accept the ground for reappeal.

3. Where calculating the purchase price of unlisted stocks by comprehensively reflecting market value, net asset value, earnings value, etc., the reflection ratio should be determined in consideration of all the circumstances, such as the situation of the company concerned, characteristics of the business type concerned, appropriateness of individual evaluation factors, etc.;

The above 408 won, which is recognized as market value at the court below, may be considered in calculating the purchase price of shares for the reasons as seen above. However, the above value was formed five months prior to the base date for calculating the purchase price of shares; information to determine the objective value of shares was not sufficient; while the net asset value of a non-listed corporation includes intangible property value, such as business rights, etc., of the relevant corporation (see Supreme Court Decision 2002Du9322, 9339, Jul. 22, 2004). Thus, it should be considered in calculating the net asset value of the non-listed stocks. The above intangible asset value and market value calculated as above are calculated as zero won per share without considering the above material to evaluate the above intangible asset value; the above net asset value and market value, which are calculated as above, reflects the objective value of the non-listed stocks; and there was no other standard to determine the purchase price of the non-listed stocks in light of the records; and there was no other error in the misapprehension of the legal principles as to the net asset value of the non-listed stocks.

4. Therefore, the reappeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)