Cho High Court Decision 2008Du3196 (Law No. 9.07, 2009)

deemed donation of stock title trust;

Although the title trustor asserted that the acquisition of shares with capital increase was acquired in the name of the Plaintiff for the purpose of securing the loan, it is deemed that the title trustor acquired shares in the name of the Plaintiff.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of gift tax of KRW 936,808,320 against the Plaintiff on June 1, 2008 is revoked (the Plaintiff stated in the complaint that the date of disposition was June 5, 2008, but it appears to be an error).

1. Details of the disposition;

A. On December 1, 2005, △△ Bank Co., Ltd. (hereinafter referred to as the “instant bank”) issued capital increase with new shares issued on December 1, 2005.

B. On December 7, 2005, Nonparty A participated in the issue of capital increase and acquired 500,000 shares of the instant bank in the Plaintiff’s name (hereinafter “instant shares”).

C. On June 1, 2008, the Defendant determined and notified KRW 936,80,320 to the Plaintiff on June 1, 2008 by applying Article 45-2(1) of the Inheritance Tax and Gift Tax Act, deeming that the Plaintiff is merely a title trustee (hereinafter “instant disposition”).

[Ground of recognition] The items of evidence Nos. 10, 11, 12, and 1, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

On November 22, 2005 and December 23, 2005, the Plaintiff lent KRW 1 billion in total to the ICE. The Plaintiff acquired the instant shares in the name of the Plaintiff for the purpose of securing the above loan to the Plaintiff, and its substance is a transfer for security. Thus, the instant disposition based on the premise that the instant shares were held in title trust in the future of the Plaintiff should be revoked.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) At the time of 2005, the Plaintiff earned wage income of KRW 17 million. (2) On December 10, 2005, the Plaintiff reported that the Plaintiff transferred 18,000 common shares of △△ Entertainment Co., Ltd. owned by himself on November 30, 2005 to ○○○ Co., Ltd. ( = 18,00x5,000) a total of KRW 99,000 won per share ( = 18,00x5,00) and paid securities transaction tax (= KRW 99,000,000) on December 12, 2005 to ○○○○.

2) The competent AD is a person who actually operates the investment of △△D Co., Ltd., △△, △△ Nam, and △△△ Investment Companies, a construction executor company. The shares of the said company are 100% equity in the name of the said company or its family members.

3) On December 23, 2008, A was sentenced to a five-year suspended sentence of imprisonment for a violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) (Seoul High Court 2008No1180), and the above judgment became final and conclusive on December 31, 2008.

4) The rightA used 14.2 billion won among the above embezzlement 14.2 billion won and participated in the capital increase with capital increase in the name of the Plaintiff, etc.

5) At the time of the prosecutor’s investigation regarding the facts constituting the crime described in paragraph 3 above, the IC stated clearly that it was intended to offer collateral to the IC and to acquire the shares of the bank of this case by borrowing the name of BB and CCC, but at the first time, the plaintiff reversed the statement that it was merely lent the name and accepted the shares of the bank of this case as collateral and it was accepted by the prosecutor for the purpose of offering them as collateral. The prosecutor asked the plaintiff as to what is required to be true, and the IC stated that the IC did not intentionally borrow the name to violate the law at that time.

[Ground of recognition] The items of evidence Nos. 15-1, 2, 2, 2, 4, and 5, and the purport of the whole pleadings

D. Determination

In light of the following circumstances revealed in the process of pleading, ① A is substantially operating the Plaintiff’s investment in 1, 2, 1, 3, 5, 1, 1, 2, and 5, and the Plaintiff’s transfer of shares to the Plaintiff at KRW 5,000,000,000, KRW 1,000,000, KRW 2,000,000,000, KRW 1,000,000,000, KRW 1,000,000,000, KRW 2,000,000,000,000, KRW 2,000,000,000,000, KRW 1,5,000,000,00,000,000,000,000,000,000,00,000,00,00.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.