Bankruptcy Trustee of the Bankrupt Heavy Industries Co., Ltd. which is the taking-off of the lawsuit of the Daewoo Heavy Industries Co., Ltd. (Attorney Park Jong-soo, Counsel for the plaintiff

Korea Investment Trust Securities Corporation

June 3, 2005

Seoul Southern District Court Decision 2002Gahap1183 Delivered on April 22, 2004

1. Revocation of a judgment of the first instance;

The defendant shall pay to the plaintiff the amount of KRW 1,773,690,52 and the amount of 6% per annum from October 10, 2002 to June 30, 2005 and 20% per annum from July 1, 2005 to the date of full payment.

2. The costs of the lawsuit are assessed against the defendant in both the first and second instances.

3. The monetary payment portion under paragraph (1) may be provisionally executed.

1. Purport of claim

The defendant shall pay to the plaintiff the amount of KRW 1,773,690,522 with 6% per annum from October 10, 2002 to the first instance judgment, and 20% per annum from the next day to the day of full payment.

2. Purport of appeal

The text of paragraph (1) is as follows.

1. Basic facts

A. Status of the parties

(1) On October 23, 2000, Daewoo Heavy Industries Co., Ltd. (hereinafter “Treatment Heavy Industries Co., Ltd.”) was partially incorporated and divided into Daewoo Heavy Industries Co., Ltd. and Daewoo Heavy Industries Co., Ltd. (hereinafter “Treatment Heavy Industries”) and was appointed as a trustee in bankruptcy on April 1, 2005 by the Incheon District Court Decision 2005Gahap12.

(2) The Defendant, as a company engaged in the sale and purchase of securities, the consignment sale and investment advisory business, and the investment advisory business, was changed on December 27, 1993 from the Korea Investment Trust Co., Ltd., a telegraph (hereinafter collectively referred to as the “Defendant”).

(b) Purchase of beneficiary certificates;

As of October 9, 1992 and May 19, 1994, Daewoo Heavy Industries opened three accounts (Account Number 3406724, 001, 34067724, 3403, 34067724- 0004), two accounts (Account Number 3406724 - 0024, 3406724, 3406724 - 005) for corporate stability 1, 2 accounts (Account Number 3406724, 3402, 3406724 - 005) for corporate stability 14 (Account Number 3564702, 001), 11 (1001), 305, 402, 2002) for the same product at the locking point of April 6, 199.

C. Claim for redemption

(1) On October 4, 2002, Daewoo Heavy Industries exercised the right to claim redemption of the beneficiary certificates of this case by serving a written complaint of this case.

(2) However, according to the terms and conditions of the Defendant’s stock investment trust, redemption of beneficiary certificates shall be redeemed at the base price on the business day following the date of redemption claim, but the redemption price shall be paid in cash on the three business days

(3) On October 7, 2002, the first business day after the date of redemption claim, the Defendant deposited KRW 15,025,056,7779,7724-06 through 3407724-024, 35467009, which was opened in the name of Daewoo Heavy Industries, in the name of the Defendant’s MF26M fund (Account number 3406724-020 through 34067724-024, 3546702-09), which was 15,025,056,779, the first business day after the date of redemption claim, in each of the above new accounts that can be immediately withdrawn (Account number 3406724-006 through 3406-24006 through 3407208).

(d) Set-off and receipt of the redemption price;

(1) On October 9, 2002, the Defendant re-depositedd KRW 1,773,690,522 of the redemption price of KRW 15,025,05,056,779, out of the MMF26M fund accounts established in the name of the Daewoo Heavy Industries [Account Number 3406724 - 0021] + 179,162,601 (Account Number 3406724 - 0024) (Account Number 3406724)] as the offset disposition title.

(2) On November 8, 2002, Daewoo Heavy Industries deposited KRW 13,734,964,438 in total, and interest thereon until November 8, 2002, for each fund that remains in the remaining redemption price and trust account in the MMF26M fund account.

【Ground of recognition” without any dispute, Gap evidence 2-1, 2, 9, Eul evidence 1, Eul evidence 2-1, 2, 6-1, 2, 8, and the purport of the whole pleadings

2. Determination on the legitimacy of a set-off

A. The parties' assertion

The defendant asserted that on October 9, 2002, the defendant set off the defendant's claim of KRW 1,773,690,52 against the defendant's claim of KRW 1,773,690,52 against the defendant's obligation to pay the purchase price to the plaintiff an amount equal to the claim of KRW 1,773,690,52 against the defendant's obligation to pay the purchase price to the plaintiff, and the plaintiff's claim is not allowed in accordance with the principle of the independence of trust property. Therefore, the defendant has the duty to pay the amount

B. Determination

(1) Facts of recognition

(A) Conclusion of a corporate improvement agreement

Treatment Heavy Industries entered into an agreement for corporate improvement (hereinafter referred to as the "corporate improvement agreement") with financial institutions that have been borne by the company in the form of shipbuilding and mechanical business sector on January 20, 200 when it could not repay its debts to the financial institutions in accordance with the terms of the initial agreement due to insolvency of financial structure, and entered into an agreement for corporate improvement with the financial institutions that held claims against the Daewoo Heavy Industries on January 20, 200 on the division of shipbuilding and mechanical business sector, establishment of new companies, mitigation of financial conditions, debt-to-equity swap to the newly incorporated companies, extension of the grace period for the exercise of claims, etc. In particular, in the case of the guarantee company in the case of the previous bonds issued by the plaintiff in the form of a guarantee pre-payment business such as the Seoul Guarantee Insurance Co., Ltd. (hereinafter referred to as the "Seoul Guarantee Insurance Co., Ltd."), the guarantee institution and the company holding company in possession

(b)transfer of trust property, which is a bond issued by Daewoo Heavy Industries;

1) The Korea Investment Trust Operation Co., Ltd. (hereinafter “Korea Investment Trust Operation Co., Ltd.”) is a company established on June 28, 200 by the Defendant’s investment and established on June 28, 200, and the Korea Investment Trust Operation Specialized Company (hereinafter “Korea Investment Trust Operation Specialized Company”) is a company established on January 19, 200 in charge of asset management by the Defendant.

2) The Korea Guarantee Insurance Co., Ltd. (hereinafter “Seoul Guarantee Insurance Co., Ltd.”) and the Seoul Guarantee Insurance Co., Ltd. (hereinafter “Seoul Guarantee Insurance Co., Ltd.”) concluded a guarantee contract for the Medical Heavy Industries and corporate bonds, and guaranteed the payment of the guaranteed bonds, with the guarantee period from the date of each issue to the date of redemption of principal of the bonds to the date of redemption of principal of the bonds.

3) The Defendant purchased the guaranteed bonds of this case as trust property, and each company bond listed in the separate sheet 1, which is part of them, was ordered by the Seoul Bank, a trustee company, to transfer them to the Korea Investment Trust on January 22, 200, and the rest of each company bond listed in the separate sheet 2 was transferred directly to the Korea Investment Trust on June 27, 200 under a contract.

(C) Repayment of principal of the bonds

The Seoul Guarantee Insurance Co., Ltd. paid the principal of the guaranteed bonds of this case on the "payment date" as stated in the attached Table 3 after the original maturity date of the guaranteed bonds of this case, and thus, the Korean investment trust operation, which is the institution holding the guaranteed bonds of this case, and the treatment Heavy Industries of the Korea Investment Trust Specialized in the Korea Investment Trust and the Korea Investment Trust Specialized in the Korea Investment Trust and the Compensation Specialized in the Korea Investment-

(D) Acceptance of claims for delayed damages

1) Meanwhile, around October 2001, the agency in possession of the guaranteed bonds of this case, including the KOB and the Defendant, prepared a written agreement between the Seoul Guarantee Insurance and the Seoul Guarantee Insurance and delayed payment of principal and interest, thereby exempting the issuing company from its payment liability only for the Seoul Guarantee Insurance and exempting the issuing company from its payment liability for the damages already incurred or incurred from the initial maturity to the actual repayment date.

2) The term “rest damages” calculated by “the date of meeting, interest rate, face value, maturity, and substitute payment” as stated in the [Attachment 1, 2] and attached Forms 1, 594, 15, 215 (the total amount of KRW 448,00,624 + 1,146, 154, 591) and interest in arrears for each corresponding entry.

3) On February 20, 2002, Korea Investment Trust Operation and Korea Investment Trust Special Metropolitan City transferred each of the claims for delayed damages and interest for delay thereof to the Defendant, and notified the Plaintiff of the transfer of each claim on February 22, 2002.

(e) Declaration of offset

On October 9, 2002, the defendant notified that the claim amount of KRW 1,773,690,522, including the amount of delayed damage compensation amount of KRW 1,594,155,215 and interest interest of KRW 179,535,307, Oct. 9, 2002 from the date following the payment date of principal of the Seoul Guarantee Insurance, should be offset against the claim amount of KRW 1,773,690,52 by the automatic claim (the sum stated in attached Form 3) against the defendant of the Treatment Heavy Industries, and the above notification reached the Treatment Heavy Industries around that time.

【Fact- without any dispute, Gap’s 3, 7, 8, 12 through 19, Eul’s 3 through 5, 7, 13, 14, 15, and the fact-finding results with respect to the Korea Securities Depository of the first instance, and the purport of the entire pleadings

(2) Whether offset is permitted

(A) In an investment trust, a beneficiary and a truster company are in a trust relationship under the Trust Act (a truster and truster company shall be a trustee under the Trust Act), and Article 17(1) of the former Securities Investment Trust Business Act (amended by Act No. 6987, Oct. 4, 2003) of the former Securities Investment Trust Business Act (amended by Act No. 6987, Oct. 4, 2003) provide that a truster company shall be responsible for managing

In addition, the trust under the Trust Act is the legal relationship in which the truster vests the property right to the trustee by legal act, and at the same time the truster manages and disposes of the property for the beneficiary or for a certain purpose (Article 1).

In other words, although the trustee becomes the nominal owner of the property right and acquires the authority to manage and dispose of the property, the authority is not given for himself/herself, but is exercised for another person in accordance with the specific purpose, so the trust property has the characteristics that is distinguishable from the inherent property of the trustee (the independence of the trust property

Article 20 of the Trust Act provides that the trustee shall not use the trust property for his/her own interest by offsetting the trustee, and that even if the trust property is formally named in the name of the trustee, the trustee may not offset the “claim belonging to the trust property” and “debt not belonging to the trust property” against the “debt not belonging to the trust property” in order to clarify that the trust property exists independently from

(B) In addition, there is no express provision as to whether a set-off against a debt belonging to the trust property and a claim not belonging to the trust property is permitted, but since the trust property has a separate position from the trustee's own property, it is not allowed for the trustee to set-off against a debt belonging to the trust property with a passive claim dealt with as his own property, because it is contrary to the purport of Article 20

(C) In light of the above legal principles, in the instant case, the Defendant’s claim for the acquisition fee against the Daewoo Heavy Industries is a claim that does not belong to trust property, and thus, it is not allowed to offset the trust property against the claim for the redemption price related to trust property.

(D) Therefore, the defendant's above-off argument is without merit.

3. Conclusion

Therefore, the defendant is obligated to pay to the plaintiff 1,773,690,52 won of the redemption price payable to the plaintiff and damages for delay calculated at the rate of 6% per annum under the Commercial Act from October 10, 2002 to June 30, 2005, which is the date following the third business day from the date of the plaintiff's claim for redemption to June 30, 2005, and 20% per annum from July 1, 2005 to the date of full payment. Thus, the plaintiff's claim of this case is justified, and the judgment of the court of first instance with different conclusions is unfair, and it is so decided as per Disposition by cancelling this and ordering the payment of the above money.

[Attachment List]

Judges Kim Young-chul (Presiding Judge)