[1] The meaning of "the day on which the claimant becomes aware of the relevant fact" under Article 16 of the Securities and Exchange Act, which is the starting point for the claim for damages due to false statements in the business report under the Securities and Exchange Act

[2] Whether a person who acquired securities in the distribution market can claim damages from false statements in business reports, etc. in accordance with Article 14 of the Securities and Exchange Act (affirmative)

[3] Whether ordinary investors can be deemed to have engaged in stock transaction by reliance on the financial statements of the business report of the target company and the audit report of the outside auditor (affirmative)

[4] The case holding that the company, director, and external auditor are liable for damages, unless it proves that the damage caused by stock transaction was not caused by false statements in the report, in case where a stock investor, who trusted that the company's business report and audit report by an external auditor, were bona fide and acquired shares based on the company's reliance, but thereby caused the loss due to the decline in stock price

[5] The case holding that even if the press report on the above window dressing accounting facts did not have a statistical significant influence on the company's share price as a result of the research of the case where the publication of the window dressing accounting fact of a specific corporation was viewed as a case, it cannot be concluded that there was no causation between the company's window dressing accounting fact and the loss caused by the stock investors' stock price decline

[1] According to Articles 186-5 and 14 of the Securities and Exchange Act, when a purchaser of securities sustains damage due to a false description or representation of any material fact in the business report or an omission of a description or representation of any material fact therein, the person who submitted the business report concerned and the director thereof shall be liable for such damage. According to Articles 186-5 and 16 of the same Act, the above liability for damages expires unless the claimant exercises the right to claim within one year from the date on which he knows the fact or within three years from the date on which the claimant becomes aware of the fact or within three years from the date on which the business report became effective. The "date on which he knows the fact" in this provision shall be deemed to be the time when the claimant actually knows the omission or false entry of the business report, and if the general public can recognize such omission or false entry, it shall be deemed that the claimant actually

[2] Article 186-5 of the Securities and Exchange Act provides that Article 186-5 of the Securities and Exchange Act shall apply mutatis mutandis to annual business reports, semiannual business reports, and quarterly reports where false statements are made in the annual business reports, etc. publicly announced in the distribution market of securities, the person entitled to claim compensation for damages pursuant to Articles 14 and 15 of the Securities and Exchange Act shall be liable to compensate for damages pursuant to Article 14 and Article 15 of the same Act. The person entitled to claim compensation for damages pursuant to Article 14 of the Securities and Exchange Act shall not be limited to the person who acquired the securities in

[3] One of the most important factors in stock transaction. An audit report prepared through an audit by an external auditor on the financial statements of the business report of the target company is the most objective material that reveals the financial status of the target company, and has a decisive influence on the formation of the stock price. Thus, a general investor who makes stock investments shall be deemed to have traded the target company’s stocks, on the assumption that the financial statements of the business report indicating the most well-known financial status of the target company and the audit report on them are duly prepared and publicly announced, and that the stock price is to have been formed based on them.

[4] The case holding that the company, director, and external auditor are liable for damages, unless it proves that the damage caused by stock transaction was not caused by false statements in the report, in case where a stock investor, who trusted that the pertinent company's business report and audit report by an external auditor, were bona fide and acquired shares based on the company's reliance, but thereafter caused damages by the decline in stock price

[5] The case holding that even if the press report on the above window dressing accounting facts did not have a statistical significant influence on the company's stock price as a result of the research of the case where the publication of the window dressing accounting fact of a specific corporation was viewed as a case, it cannot be concluded that there was no causation between the company's window dressing accounting fact and the damage caused by the stock investors' stock price decline

[1] Articles 14, 16, and 186-5 of the Securities and Exchange Act / [2] Articles 14, 15, and 186-5 of the Securities and Exchange Act / [3] Articles 17 (2) of the Act on External Audit of Stock Companies, Articles 14 (1), 186-5, and 197 (1) of the Securities and Exchange Act / [4] Articles 14, 15, 186-5, and 197 of the Securities and Exchange Act, Article 17 (2) of the Act on External Audit of Stock Companies / [5] Articles 14, 15, 186-5, and 197 of the Securities and Exchange Act, Article 17 (2) of the Act on External Audit of Stock Companies

[1] [3] Supreme Court Decision 96Da41991 delivered on September 12, 1997 (Gong1997Ha, 3078) / [1] Supreme Court Decision 93Da30402 delivered on December 21, 1993 (Gong194Sang, 490)

Plaintiff 1 and 350 others (Law Firm Hannuri, Attorneys Kim Young-young et al., Counsel for the plaintiff-appellant)

Defendant 1 Accounting Corporation and four others (Law Firm Square, Attorneys Kim Jong-soo et al., Counsel for the defendant-appellant)

Seoul Central District Court Decision 200Gahap78858, 85856 Decided January 13, 2005

December 7, 2005

1. The judgment of the court of first instance is modified as follows.

A. Plaintiffs (excluding Plaintiffs 2)

(1) Defendant 1’s accounting firm’s amount of money indicated in “the amount of personal seal 2” in the annexed sheet of “the amount of money” and 5% per annum from September 7, 2002 to January 18, 2006 and 20% per annum from the next day to the full payment date;

(2) Defendant 2, 3, 4, and Daewoo Electronic Co., Ltd. shall pay 20% each year from September 7, 2002 to January 18, 2006 and 5% each year from the following day to the full payment date, each of the money listed in the “personal Fee Table 2” column of the “personal Fee Table 2” column with Defendant 1 Accounting Firm and each of the money listed in the “Personal Fee Table 2” column of the attached Table;

sub-payment.

B. Defendant 1’s accounting firm pays to Plaintiff 2 5,860,080 won with 5% interest per annum from September 7, 2002 to January 18, 2006 and 20% interest per annum from the following day to the full payment date.

C. The remaining claims of the plaintiffs (excluding plaintiffs 2) and the claims against the plaintiffs 2, 3, 4, and Daewoo Electronic Co., Ltd. and the remaining claims against the defendant 1 accounting corporation are all dismissed.

2. The plaintiffs (excluding plaintiffs 2) and the defendants share 10 minutes of the total costs of the lawsuit and the remaining costs of the lawsuit shall be borne by the plaintiffs and the defendants, respectively, and the total costs of the lawsuit between plaintiffs 2 and the defendants 2, 3, 4, and treatment electronic company shall be borne by the above plaintiff. The total costs of the lawsuit between plaintiffs 2 and the defendant 1 accounting corporation shall be ten minutes of the total costs of the lawsuit between the plaintiff 2 and the defendant 1 accounting corporation, and the plaintiff 7

1. Purport of claim

The Defendants shall pay to each Plaintiff listed in the “Plaintiff List” column, and to each money recorded in the “Plaintiff List” column as stated in the “Plaintiff List” column, and to this end, the amount calculated by the rate of 25% per annum from the day following the day of service of the copy of the request for correction of the purport of the claim as of September 2, 2002 to the day of complete payment.

2. Purport of appeal

Of the judgment of the court of first instance, the part against the Plaintiffs ordering payment shall be revoked. The Defendants shall pay to each Plaintiff listed in the “Plaintiff” column in the “Plaintiff List” column, and to each of the money recorded in the “Plaintiff List” column in the “Plaintiff List” column, and to this, the amount calculated at the rate of 20% per annum from the day following the day of service of a copy of the application for correction of the purport of the claim as of September 2, 2002 until the day of full payment.

The Defendants: The part against the Defendants in the judgment of the first instance is revoked, and the Plaintiff’s claim corresponding to that part is dismissed.

1. Basic facts

A. Status of the parties

(1) The Defendant Treatment Electronic Co., Ltd. (hereinafter “Defendant Treatment Electronic Co., Ltd.”) is a corporation established for the purpose of manufacturing and selling electrical and electronic apparatus. Defendant 1’s accounting corporation (hereinafter “Defendant 1 accounting corporation”) was an accounting corporation under Article 23 of the Certified Public Accountant Act, and succeeded to the rights and obligations of Nonparty 1’s merger with Nonparty 1 accounting corporation on May 10, 199, and Nonparty 1 was an accounting corporation under Articles 2 and 3(1) of the Act on External Audit of Stock Companies (hereinafter “Act on External Audit of Stock Companies”) and Article 27 business years (from January 1, 1997 to December 31, 1997) and 28 business years (from January 1, 1998 to December 31, 198). Defendant 2, 3, and 4 were employed as a director of the Defendant Treatment Electronic Co., Ltd., as recorded in the attached Table.

(2) The Plaintiffs, as individual investors, are those who held the Defendant’s shares.

(b) The window dressing settlement and audit of accounts for the business year 27 (197) (197);

(1) The defendant 2 ordered the defendant 3, who was the representative director of the defendant treatment electronic company, to make a false financial statement as if the net income was about about 41 billion won and to settle the accounts in installments during the 27th business year of the defendant treatment electronic company. The defendant 3 instructed the defendant 3, who was the representative director of the defendant treatment electronic company, to make a false financial statement as if the net income was about 41 billion won, through the defendant 4, who was the senior executive director in charge of the financial affairs of the defendant treatment electronic company, to operate the settlement of accounts for the defendant treatment electronic company through the defendant 4, who was the senior executive director in charge of the financial affairs of the defendant treatment electronic company.

(2) In preparing financial statements for the 27-year financial year, 1.3 billion won in the current 27-year financial year, 6,03.7 billion won in the inventory account of the current 2-year financial year, 1.3 billion won in the current 7-year financial year, 2.3 billion won in the current 4-year financial year, 70 billion won in the current 4-year financial year, and 4.7 billion won in the current 6-year financial year financial year, 70 billion won in the current 4-year financial statements, and 4.7 billion won in the current 4-year financial statements, 1.7 billion won in the current 4-year financial year, 70 billion won in the current 7-year financial statements, and 4.7 billion won in the current 4-year financial statements, 70 billion won in the current 70 billion won in the settlement of accounts, and 4.6 billion won in the current 7 billion won in the settlement of accounts, 19.7 billion won in the financial statements.

(3) After the accounting corporation conducted an accounting audit of the financial statements for the 27th business year of the Defendant Daewoo Electronic, the non-party 1 prepared an audit report on December 31, 1997, stating that the above financial statements are properly indicated in accordance with the corporate accounting standards, such as financial status, business performance, changes in earned surplus, and cash flow at the time of December 31, 1997, and announced it on February 28, 1998.

(4) On March 31, 1998, the defendant treatment-electronic prepared the 27th annual business report including the above financial statements, and announced them to the Stock Exchange, the daily newspaper, etc. with the above audit report attached.

(c) The installment settlement and audit of accounts for the business year 28 (198) (198);

(1) Defendant 2 ordered Defendant 2 to prepare a false financial statement as if the net profit per unit was about five billion won on March 20, 1999 to Defendant 1 co-defendant 1 and Defendant 4, who had a vice president, of the first instance court, who had a representative director of the Defendant treatment Electronic Co-defendant 1 and a vice president, to settle the accounts by way of a false financial statement as if the net profit per unit was about five billion won. Accordingly, Defendant 4 instructed a working person in charge of the accounting of the Defendant treatment Electronic Co-defendant 1 to manipulate the settlement of accounts to the working person in charge of accounting of the Defendant treatment Electronic Co-defendant 4.

(2) When preparing financial statements for the 28 business year, working-levels in charge of the accounting of the defendant Treatment Electronic shall appropriate 6,70.9 billion won (6,03.7 billion won prior to the 27th business year) in the same way as the financial statements for the 27th business year were prepared, and shall transfer 168.9 billion won to the account of false foreign currency sales; (2) as a result of the 1998 financial statements for loans, 31.1 billion won out of the false foreign currency sales in the 27th business year; (3) as a result of the 28th business year; (4) as a result, 3.5 billion won out of the loan sales in the 27th business year; (4) as a result, 3.5 billion won out of the loan sales in the 27th business year; and (5) as a result, 4.5 billion won out of the loan sales in the 27th business year; and (4) as a result, 29.7 billion won out of the 19.7 billion won in the same financial statements.

(3) Around February 1999, Nonparty 1’s accounting firm conducted an accounting audit of the financial statements of the 28th business year of the Defendant Daewoo Electronic (hereinafter collectively referred to as “instant audit”). On March 23, 1998, Nonparty 1 prepared and published the audit report on the financial statements of the 28th business year (hereinafter collectively referred to as “instant audit”). Nonparty 1’s audit report: (i) the settlement delay of accounts arising from business exchange between conglomerates, which led to business exchange between conglomerates, could not sufficiently carry out necessary audit procedures, such as external inquiries about part of overseas sales claims; and (ii) the part of the inventory assets in the Gwangju factory was unable to be present at the actual inspection due to the employees’ refusal to perform the work due to business exchange; (iii) the balance of sales claims and inventory assets could not be confirmed due to the characteristics of other audit records; and (iv) the said financial statements were indicated to the effect that there was an adequate opinion in accordance with the corporate accounting standards as of December 31, 1998.

(4) On March 31, 1999, the defendant treatment-electronic prepared a business report for the 28 business year including the above financial statements and announced it to the Stock Exchange, the daily newspaper, etc. with the above audit report attached.

(d)the publication of liquidity crisis and window dressing accounting of the Treatment Group;

(1) Since the end of 1997, the Treatment Group suffered difficulties in raising funds. However, on July 22, 1998, the Financial Supervisory Commission regulated the limit on the issuance of corporate bills and set a financial institution’s holding limit on the corporate bonds issued by a large enterprise on October 28, 1998, thereby restricting the issuance of corporate bonds by the large enterprise, thereby getting worse the financial crisis of the Treatment Group. On October 29, 1998, the Labor Policy Group published the report of “The Treatment Group has an emergency level in the Treatment Group” at the Seoul branch of the Seoul branch of the Korea Labor Policy and Securities Policy.

(2) On December 19, 1998, the Operating Council of the Creditor Financial Institutions of the Treatment-Related Companies entered into an agreement with the Treatment-Related Group to improve the financial structure through debt redemption through asset sale, separation, sale, merger, etc. Around January 1999, the domestic credit rating company published the credit rating of the issuance of the corporate bonds of the Defendant Treatment-Electronic from BB (-) to BB (-), and from BB (B-) to B (+) from May 4, 1999.

(3) On December 19, 1998, financial institutions that have joined the Council for Major Claims of the Treatment Group entered into an agreement for the improvement of the financial structure of the Treatment Group, but some financial institutions began to recover credit extended to the Treatment Group affiliates.

(4) On the other hand, as a large-scale business exchange between the large-scale conglomerate groups is promoted at the government-led initiative after the end of 1997, Samsung Group and Treatment Group agreed in principle to exchange Samsung Motor Co., Ltd. and the defendant treatment electronics on December 1998. However, the Samsung Group issued a judgment that it is not worth taking over the defendant treatment electronics on May 1999 as a result of the Samsung Group’s actual inspection of the assets and liabilities of the defendant treatment electronics and announced it to the public.

(5) Around July 1999, the Treatment Group provided stocks and real estate owned by Defendant 2, the president, and the Treatment Group, as collateral to the bond group on July 19, 199. The Treatment Group announced “the plan to accelerate the restructuring of the Treatment Group and to implement the corporate restructuring” to the effect that the Treatment Group is independent corporate entity. The Government and the creditor financial institutions provided four trillion won to the Treatment Group in the form of commercial paper purchase and corporate bonds acceptance on July 22, 1999, and extended six-month maturity for the corporate bonds with maturity. The Government took measures not to repurchase the Treatment Group’s corporate bonds with maturity on August 12, 1999, but eventually, the Treatment Group commenced the corporate restructuring improvement (outoutoutoutoutoutoutoutoutoutoutoutoutout) for the Treatment Group’s affiliates including the Defendant Treatment Group on August 26, 1999.

(6) As a result of the accounting firm’s audit for corporate financial structure improvement work for the treatment group affiliate affiliates, it was revealed that as of the end of 1998, the difference between the net asset value and the real net asset value on the accounting books of the defendant treatment electronic company from the end of 3.6 billion won, and the actual asset value of the treatment group affiliate affiliates on October 26, 1999 by the report of each daily newspaper showed that the actual asset value of the treatment group affiliated companies was at least 30 billion won compared to the book value. On November 2, 1999, it became known that as a result of the audit of the defendant treatment electronic company on November 2, 199 that the assets amount to KRW 5.46.7 billion, the liabilities amount to KRW 7.29 billion, and the liabilities amount to KRW 6,82.3 billion, became known to the general accounting of the defendant treatment. The result of the above accounting firm’s audit was officially announced on November 4, 1999.

E. The plaintiffs' share purchase

(1) On February 28, 1998, after the business report and audit report set forth in Articles 27 and 28 were disclosed to the Korea Stock Exchange, etc., the Plaintiffs purchased the Defendant’s shares (hereinafter “instant shares”). The date of purchase, the number of purchased stocks, the actual acquisition value, the date of sale, the number of sold stocks, the number of sold stocks, and the actual disposal price are as stated in the attached Form 1, 2.

(2) On November 30, 2001, the shares of the Defendant Treatment Electronic were reduced at the rate of 7:1 on November 30, 2001, and thereafter the shares of the Defendant Treatment Electronic are less than 1,000 won per share as the shares after capital reduction.

(f) Partial repayment by co-defendants in the first instance trial.

The plaintiffs, on March 4, 2005, received 180 million won from co-defendant 2 of the first instance court, who was an outside director of the defendant treatment electronics, aggregate of KRW 180 million from the co-defendant 1 of the first instance court, who was a director of the defendant treatment electronics, aggregate of KRW 180 million on April 12, 2005, and KRW 150 million on April 15, 2005 from the co-defendant 3 of the first instance court, who was a director of the defendant treatment electronics, and KRW 180 million on March 21, 2005 and April 11, 2005 from the co-defendant 4 of the first instance court, who was a director of the defendant treatment electronics, aggregate of KRW 180 million on March 21, 2005 and KRW 100 million on April 11, 2005, KRW 2005 from the co-defendant 6.7 million on March 25, 20008.

[Based on Recognition] In the absence of dispute, entry of Gap's 1 through 8, 10 through 18, 20, 23 through 25, 28 through 31, 34 through 37, 39, Eul's 1 through 31, 34 through 37, 39, Eul's 1 through 3, 5 through 7, 10 through 18, 22 through 25, 28 through 37 (including additional numbers), and the result of an inquiry into the Korea Stock Exchange of the first instance court

2. Responsibility under Article 197 of the Securities and Exchange Act and Article 17 (4) of the External Audit Act with respect to the defendant 2, 3, and 4;

The plaintiffs primarily asserted that the defendant 2, 3, and 4 are the directors of the defendant treatment Electronic Co., Ltd., who are responsible for compensating the plaintiffs for their damages in accordance with Article 197 of the Securities and Exchange Act and Article 17 (4) of the External Audit Act.

However, the above Defendants are directors of the Defendant Daewoo Electronic, and Article 197(2) of the Securities and Exchange Act and Article 17(2) of the External Audit Act provide for the auditor’s liability for damages against bona fide investors. Article 17(4) of the External Audit Act provides that if an auditor bears the liability for damages, the director of the company subject to audit shall be jointly and severally liable for damages if the auditor and the director of the company subject to audit are jointly and severally liable for damages. Therefore, the above Plaintiffs’ aforementioned assertion against the Defendants is without merit.

3. The responsibility under Article 197 of the Securities and Exchange Act and Article 17 (2) of the External Audit Act and the responsibility under Article 186-5 and Article 14 (1) of the Securities and Exchange Act with respect to processed electronics of the defendant 1 accounting corporation;

(a) Occurrence of liability for damages;

According to the above facts, there are false statements or indications as mentioned above in the business report of this case and the audit report of the 27th and 28th (hereinafter “the audit report of this case”) about the defendant treatment electronics, and this is about important matters that may affect the investment judgment of investors. Since, after the disclosure of the business report of this case and the audit report of this case, the plaintiffs acquired the shares of the defendant treatment electronics in the open market on the trust and its basis, and then suffered losses from the decline in the stock price, the defendant treatment electronics, barring special circumstances, is the person who submitted the business report of this case, and pursuant to Articles 186-5 and 14(1) of the Securities and Exchange Act as the director of the defendant treatment electronics at the time of the submission of the business report of this case, the defendant treatment electronics shall be liable for the damages suffered by the plaintiffs pursuant to Article 197 of the Securities and Exchange Act and Article 17(2) of the External Audit Act as the auditor of the defendant treatment electronics.

B. Determination as to the defendants' assertion

(1) Whether the exclusion period has lapsed

(A) Defendant 2, 3, 4, and Treatment Electronics

The financial standing of the Defendant Daewoo Electronic was aggravated from around 1998 and the credit rating decreased, and the “the plan to accelerate and implement the restructuring of the Treatment Group” was announced on July 19, 199, and on August 26, 199, the company’s financial structure improvement work for the treatment group affiliates including the Defendant Daewoo Electronic was commenced, and there was a newspaper report suggesting the possibility of window dressing accounting of the Treatment Group on October 19, 199 and October 22, 199. However, at the above time, the Plaintiffs knew that there was false entry or indication in the business report of this case, or that material facts were not indicated or indicated. However, the instant lawsuit was filed on October 24, 2000 after the lapse of one year thereafter, and thus ought to be dismissed.

(b) the sales board;

According to Articles 186-5 and 14 of the Securities and Exchange Act, when a purchaser of securities sustains damage due to a false entry or indication or omission of important matters in the business report, the corporation concerned, its director, etc., who is the person who submitted the business report, shall be liable for such damage. According to Articles 186-5 and 16 of the said Act, the above liability for damages expires if the claimant does not exercise his right to claim within one year from the date on which he became aware of the fact or within three years from the date on which the business report became effective. The "date on which he became aware of the fact" in this provision is deemed to be the time when the claimant actually knows the omission or false entry in the business report, and if the general public can recognize the omission or false entry in the business report, it is reasonable to deem that the claimant actually recognized such fact, barring any special circumstances (see Supreme Court Decisions 93Da30402, Dec. 21, 1993; 9Da4191, Sept. 12, 1997).

In this case, the aforementioned Defendants’ assertion alone is insufficient to deem that the Plaintiffs knew of the fact that there was a false entry or indication or an omission of a material fact in the business report of this case before October 24, 1999, and there is no other evidence to acknowledge it otherwise. As seen earlier, the time when the fact of window dressing accounting of the Defendant Treatment Electronic was known to the general public is the time when the results of the actual inspection were publicly announced on October 26, 1999 or when the results of the above actual inspection were publicly announced on November 4, 199, and it is reasonable to deem that the Plaintiffs, a general investor, knew of the fact of window dressing accounting of the Defendant Treatment Electronic at the time when they were to be reported to the media. The instant lawsuit is apparent in the record that it was filed on October 24, 200, before one year has passed thereafter. Accordingly, the aforementioned Defendants’ exclusion period and assertion are not accepted.

(2) Whether Article 14 of the Securities and Exchange Act does not apply to the acquisition of securities in the distribution market

(A) Defendant 2, 3, 4, and Treatment Electronics

The claim for damages pursuant to Article 14 of the Securities and Exchange Act is limited to those who have acquired securities in the stock market by "public offering or sale" and is not recognized to those who have acquired securities in the stock market. Therefore, the plaintiffs cannot claim damages against the above defendants.

(b) the sales board;

Articles 8 and 12 of the Securities and Exchange Act provide that, when a public offering of new or outstanding securities is made, an issuer shall submit a securities registration statement to the Financial Supervisory Commission, keep a prospectus at a certain place for public inspection. Article 14 of the Securities and Exchange Act provides that, when a purchaser of securities suffers damage due to a false entry or indication in a securities registration statement and a prospectus or an omission of an important description or indication, the issuer shall be liable to compensate for such damage. In addition, Articles 14 and 15 of the Securities and Exchange Act shall apply mutatis mutandis to a business report, a semiannual report, and a quarterly report, and Article 14 and Article 15 of the Securities and Exchange Act shall be liable to compensate for damage in accordance with Articles 14 and 15 of the Securities and Exchange Act. Accordingly, a person eligible to claim compensation for damage pursuant to Article 14 of the Securities and Exchange Act shall not be limited to a person who has acquired securities in the securities market, but shall also be deemed to include a person who has acquired securities in the distribution market.

(3) Whether there exists a cause attributable to the Defendants

(A) Defendant 2, 3, and 4’s assertion and determination thereof

(i)head of the State;

Defendant 2, 3, 4, and treatment-electronics did not know that they were false entries in the instant business report, and as long as they trusted the audit results of an external auditor, they did not commit negligence on the part of the Defendants, who were in charge of affairs unrelated to accounting affairs at the time, and did not know the false entries.

(ii) the board;

Article 186-5 and Article 14(1) of the Securities and Exchange Act provide that the person liable for compensation shall not be liable for damages if he proves that he could not know that there was a false entry in the business report, etc. even though he had paid considerable attention.

However, in light of the fact that Defendants 2, 3, and 4 offered false preparation of the instant business report, as well as required to obtain approval from the board of directors under the Commercial Act, and directors are obligated to supervise the performance of their duties as members of the board of directors, it cannot be deemed that they fulfilled their duty of due care merely because they did not take charge of accounting affairs and trust the audit result of the external auditor, and there is no evidence to prove that they could not know the false entry even if they fulfilled their due care. Therefore, the above Defendants’ assertion is without merit.

(B) Defendant 1’s assertion and determination thereof

(i)head of the State;

The accounting firm of Nonparty 1 performed the duty of care required for the auditor since it duly performed the accounting audit with respect to Defendant treatment electronics in accordance with the standards for accounting audit. Nonparty 1’s accounting firm cannot be deemed to have breached the duty of care in the audit on the ground that it was revealed that the accounting firm of Nonparty 1 breached the duty of care in the audit on the ground that the fact of window dressing accounting was revealed through special supervision procedures with an essential difference

2) Facts of recognition

Nonparty 1’s accounting firm conducted an external audit of the instant business report as follows.

A) Inspection of inventory assets

While conducting an inspection on the raw materials of the largest part of the inventory assets, it was difficult to review whether there is the actual quantity as to the inventory assets, or to review the long-term fire, and the fire-fighting of the fire-fighting of the fire-fighting of the fire-proof.

(B)an audit of foreign liabilities;

① On December 31, 1997, Nonparty 1’s accounting firm submitted the loan statement from Defendant Daewoo Electronic, and asked the financial institutions listed in the above statement about whether the debt remains. However, as to the financial institutions which were not stated in the above specification but which were traded with Defendant Daewoo Electronic, it did not ask any question about whether the debt remains. In addition, Nonparty 1’s accounting firm neglected some of the content of the response from the financial institution, even though it was omitted in the accounting book.

② Although Nonparty 1’s accounting firm received the head of the current account transaction center from a financial institution until the date of audit and inspection, and received only the head of the current account transaction center from a certain financial institution on or after January 8, 1998, and received the submission of the head of the current account transaction center by January 8, 198, and did not find a large number of obligations with a maturity of payment after January 8, 1998.

③ Although Nonparty 1’s accounting firm requested the Defendant Daewoo Electronic to submit a supplementary note while auditing loans, it failed to obtain it. In addition, Nonparty 1’s extra debt arising from the transaction of bills can be relatively easily discovered by comparing and reviewing the borrowed account statement with the bank’s borrowing statement. However, Nonparty 2 did not perform the audit procedure. Accordingly, Nonparty 1’s borrowing of bills that Nonparty 1 did not discover during the 27-year period is KRW 847.1 billion.

④ The total amount of assets of Defendant Daewoo-Electronic increased by KRW 399 billion in comparison with the end of the year preceding the year 1997, and the short-term loans decreased by KRW 155.3 billion, which led to a very high probability of the existence of secondary liabilities. However, Nonparty 1’s accounting firm had a probationary accounting firm take charge of a financial institution trading inquiry and a non-accounting in charge of payment of bills and checks.

⑤ Nonparty 1’s accounting firm, while conducting an accounting audit for the fiscal year of 28 years, found out, as a result of the Bank’s inquiry, debt amounting to KRW 189 billion, and the Defendant’s treatment electronics corrected that and accounted for the other account in foreign currency sales.

(C)the inspection of unclaimed items;

① The Defendant Daewoo Electronic Co., Ltd has increased its inventory assets by appropriating imported goods sold or cleared into the manufacturing process at the cost without replacing them with the account for sales costs. The amount falsely appropriated as the items of non-claimed goods in the preceding business year is KRW 17.55 billion and KRW 15.8 billion in the 27th business year.

② During the 27th business year, Nonparty 1’s accounting firm extracted the sample of the credit on the unclaimed description and examined the documents related to the credit (L/C) and stated in the audit report that it was impossible to find exceptions. However, the six of the 10 L/C verified by Nonparty 1 accounting firm was false and Treatment Electronics did not submit the documentary evidence, such as the L/C.

③ Nonparty 1’s accounting firm extracted the letters of credit stated in the unclaimed description during the 28th business year and demanded the Defendant Treatment to submit the evidence, but failed to do any review on the failure to submit the evidence.

D) Audit of retirement benefit allowances

① When calculating the estimated amount of retirement benefits during the period of 27 and 28 years, the Defendant treatment electronics adjusted the number of years of service calculated by subtracting one year from the actual number of years of service of the employee, and appropriated the retirement benefit appropriation amount of 29.3 billion won (27 years of service) and 30.5 billion won (28 years of service) in the manner that the amount of monthly salary is not included in the total amount of benefits subject to calculation of retirement benefits.

② Nonparty 1’s accounting firm completed the audit procedure only by analyzing the estimation amount of retirement allowances without undergoing sample audit procedures when auditing the accounting retirement benefits allowances for the 27th business year.

③ At the time of the external audit on the 28th business year, the Defendant Daewoo Electric was able to deduct the number of years of service of all employees from one year, and entered only the accounting and settlement team, and only the personnel card of the executives and employees of the accounting and settlement team to conceal the fact of deduction of the number of years of service of the executives and employees was submitted to Nonparty 1’s certified public accountants. Nonparty 1’s accounting corporation did not discover that 20 employees (10 employees of the Giri department and 10 employees of the Giri department and 10 employees of the Giri department) out of the total number of 24,00 employees, as samples, were extracted from 20 employees among the total number of 24,00 employees, and did not discover that 5 employees

E) raise the issue of a working-level accountant

With respect to the audit of the 28th business year, Nonparty 2, who was an accounting firm for the practical responsibility of Nonparty 1’s accounting firm, stated the opinion of the comprehensive audit as “Refusal”. However, on March 25, 1999, Nonparty 3, the partner in charge of Nonparty 1’s accounting firm, prepared a summary audit report on March 24, 199, stated that “No review could be conducted due to failure to submit data to review the authenticity, etc. of inventory assets; “no review could be conducted due to failure to produce data to examine the authenticity, etc. of inventory assets”; “no audit could be conducted due to lack of data to audit inventory assets, research expenses, outstanding amounts, deposit deposits, etc.”; and “no audit is conducted by Nonparty 2, the partner in charge of Nonparty 1’s accounting firm, entered the summary audit report on March 25, 199, stating that it did not constitute the pertinent column for non-party 2’s name, signature and seal, and the column of the comprehensive audit report column as “No. 2”.

F) Issues of audit opinion in the 28th business year

① While a limited opinion is an opinion that only a certain portion of the company’s financial statements is insufficient to conduct an audit and inspection, the remaining matters are inappropriate. On the other hand, the refusal of opinion is not believed to be a whole of the company’s financial statements, and the meaning or effect of the limited opinion is significantly different

② The reason for the limited opinion presented in the audit report by Nonparty 1 accounting corporation was that Nonparty 1 failed to conduct an audit of KRW 1.6 billion in total, including overseas sales claims of KRW 382 billion, Gwangju Factory Inventory 260 billion, and KRW 1.642.5 billion in total. However, in light of the fact that the size of assets of Defendant Daewoo-Electronic was KRW 5.871.7 billion, the audit of KRW 1.642.5 billion in total was not conducted as to the amount which has a particularly significant impact on investors’ decision-making, and thus, the rejection of the opinion should have been expressed. In fact, the limited opinion was confirmed as false assets.

[Based on the recognition] 1 through 3, 5, 8, 11, 20 evidence of Gap, Eul 1 through 21, 23 through 32 of Eul, Eul 1, 2, 7, 10, 12, 13, 38 of evidence of Eul (including each number), non-party 4 and 3 of the witness of the first instance trial, and the purport of the whole pleadings.

(iii) the board;

Nonparty 1’s accounting firm’s breach of its duty as an auditor by not taking any measures against the finding out, even though Nonparty 1’s audit of the business report for the 27th and 28th business year, on which the possibility of the illegality and error of the financial statements was discovered, while conducting an audit of the business report for the 27th and 28th business year. Thus, the above assertion by Defendant 1 accounting firm is without merit.

(4) Whether there exists causation between window dressing accounting and stock acquisition

(A) The defendants' assertion

In the event that the purchaser of securities knew of the fact that there was a false entry or indication or an omission of important matters in the business report at the time of its acquisition (Article 186-5, Article 14(1) of the Securities and Exchange Act), and if a third party intends to claim damages from an auditor due to false entry of an audit report, he/she should have used the audit report in trust (Article 197 of the Securities and Exchange Act and Article 17(2) of the External Audit Act). (1) The audit report of this case where the non-party 1’s opinion was disclosed on March 29, 199, and the credit rating of the credit rating agency for the defendant treatment electronic was adjusted to a non-investment grade on May 4, 199, and (3) the Plaintiffs were not entitled to take over the defendant treatment electronic data on May 19, 199, as a result of the examination of the assets and liabilities of the defendant treatment electronic company, and thus, the Plaintiffs could not be widely aware that the Plaintiffs were able to obtain the defendant treatment electronic company’s shares before its acquisition.

(b) the sales board;

① On July 22, 1998, the treatment group suffered liquidity crisis around the time of the so-called IMF crisis. The Financial Supervisory Commission’s regulation on the issuance limit of the CP and the restriction on corporate bonds holding to financial institutions on October 28, 1998 was issued. ② The report of the “Treatment Group” of the Seoul branch of Korea Labor Policy Co., Ltd. on October 29, 1998 was disclosed, the financial shortage and crisis of the Treatment Group became widely known, and even thereafter, the media’s article that the Treatment Group’s affiliates including the Defendant Treatment Electronic are suffering from financing crisis, ③ the major bond holders of the Treatment Group concluded an agreement for the improvement of financial structure with the treatment affiliated companies on December 19, 198, ④ there was no possibility that it would affect the balance of the domestic financial statements of the company’s investment and electronic financial statements, ④ there was no possibility that it would affect the company’s financial statements and electronic redemption of its assets and electronic bonds, ④ there was no possibility that it could affect the company’s future financial statements and electronic financial structure.

However, in a stock transaction, the company's financial status is one of the most important factors for the formation of stock price. An audit report prepared after the audit by an external auditor of the company's financial statements of the business report is the most objective material for revealing the company's financial status, which shall have a decisive influence on the formation of the company's stock price. Thus, a general investor who invests in stocks shall be deemed to have traded the company's stocks under consideration that the company's financial statements of the business report indicating the most well-known financial status of the company in question and the audit report thereon are properly prepared and published and made public (see Supreme Court Decision 96Da4191 delivered on September 12, 197).

In light of the above legal principles, the above facts alone are insufficient to recognize that the Plaintiffs were aware of false information in the financial statements of the 27th and 28th annual business report at the time of acquiring the shares of the Defendant Daewoo Electronic, and there is no other evidence to acknowledge this. Therefore, the Defendants’ above assertion is without merit.

C. Scope of liability for damages

(1) Scope of stock transactions with causation

Where a person acquires the shares of the Defendant Treatment Electronic after the business report and audit report of this case were disclosed, it is reasonable to deem that the person trusted such shares to be traded based on the trust and, except in extenuating circumstances.

However, the audit report submitted to the Korea Stock Exchange on February 28, 1998; the time when the 27th business report was published; the time when the 27th business report was published was March 31, 1998; the time when the 28th business report was published; the fact that the 28th business report was published on March 31, 199; the time when the 28th business report was widely known to the general public; and the fact that the decentralization accounting report of the defendant treatment electronic was officially announced on October 28, 1999; and the fact that the 27th business report was published on November 4, 1999, when the result of the 27th business report was officially announced on November 4, 199. Thus, the plaintiffs purchased the shares of this case with the knowledge that the 27th business report and the audit report were falsely stated.

① Therefore, the damages caused by the false disclosure of the audit report of this case are limited to the damages caused by the stock transaction acquired on November 4, 1999, respectively, from February 28, 1998 when the audit report of this case was published (Claims against Defendant 1 Accounting Corporation) and (2) from March 31, 1998 when the report of this case was published from March 31, 1998 when the report of this case was published (Claims against Defendant 2, 3, and 4, who are the directors thereof).

(2) Judgment as to the defendants' assertion

(A) Existence of causation between window dressing accounting and damage

1) The defendants' assertion

Article 15(1) of the Securities and Exchange Act provides that the scope of liability for damages caused by false entry in a business report, etc. shall be the amount calculated by deducting the price of the securities sold by the claimant in question from the actual amount paid by the claimant in acquiring the securities concerned. However, Article 15(2) of the Securities and Exchange Act provides that the liability for damages shall not be held for the portion of the liability if the claimant proves that all or part of the damages suffered by the claimant were not caused by a false entry or indication, or by an omission of entry or representation of important matters. In this case, in light of the situation of share price decline occurring after the fact of window dressing accounting was known to the general public on October 26, 1999, the Plaintiffs cannot be held liable for damages due to the lack of causation between the window dressing accounting and the damages suffered by the Plaintiffs, even if the Defendants’ liability for damages is recognized, even if the window dressing accounting and the share price decline due to the lack of causation between the window dressing accounting and the losses suffered by the Plaintiffs.

2) Facts of recognition

A) Determination of causation by case research method (Eent Study)

① The summary of the case study method [refer to “the report (No. 52) on the result of appraisal by the share holder with respect to the treated electronic accounting as a professor of Lhee University,” and “the research on the treated electronic share holder (No. 57)”

The study of this case is a financial research method that makes it possible to measure the degree of the stock price in a measurable manner by comparing the stock price with the time when there was no specific case, and if there were other behaviors, the degree of the stock price can be measured. According to the efficient market theory, since the stock price reflects all available information at present and the change in stock price is attributable to new information in the stock market, it is possible to measure how the case in question influenced the stock price by investigating the change in the price of the period during which a single case occurred.

The study of this case presumed that the new information on the category of stocks subject to research was based on a new information by estimating the abnormal return rate before and after the time when the new information was disclosed to the market, and that the return rate of stocks for the category of stocks subject to research was determined by the market and the corporate fault factors before and after the occurrence of the case, presumed that the return rate of stocks for the category of stocks subject to research was determined by the market and the corporate fault factors, and by using the data of the share price before and after the occurrence of the case, found whether the new information was affected the stock price by calculating the abnormal return rate of stocks subject to research before and after the date when the new information was known to the market, and by investigating whether the size was 95% or more by estimating

(2) Results of analysis by the case study method

경희대학교 교수 박상수의 ‘대우전자 분식회계에 관한 주가 감정 결과 보고서(을가 제52호증)’에 의하면, 사건연구방식을 피고 대우전자의 주가 분석에 적용하여 ㉮ 대우그룹의 분식회계 사실이 일반에 알려진 날인 1999. 10. 26.을 사건일로 정하고, 분식회계 사실의 사전 유출가능성을 고려하여 사건 전 기간(pre-event window)은 거래일을 기준으로(이하에서는 모두 거래일을 기준으로 한다.) 사건일 전 40일간, 즉 1999. 8. 27.부터 1999. 10. 25.로, 사건 후 기간(post-event window)은 1999. 10. 26.부터 50일 후인 2000. 1. 10.까지로 각 설정하며, 모형추정기간은 사건 전 190일부터 41일까지 150일로 정한 후 한국증권거래소 종합주가지수 수익률을 시장수익률로 대용하여 위 모형추정기간 동안 나타난 피고 대우전자의 수익률과 종합주가지수 수익률을 통하여 피고 대우전자 주식의 위 사건기간 중의 기대수익률에 관한 회귀방정식을 추정하고, ㉯ 사건기간 중 피고 대우전자의 기대수익률에서 벗어난 비정상수익률을 계산함에 있어, 사건기간 중 실현된 피고 대우전자 주식의 실제수익률에서 사건기간 중의 시장수익률을 위 회귀방정식에 대입하여 구한 기대수익률을 차감하는 방법으로 산정하여 그 비정상수익률로부터 사건기간 동안의 누적 비정상수익률(cumulative excess return)을 계산한 다음, ㉰ 피고 대우전자의 분식회계 사실이 일반에 알려진 것이 피고 대우전자의 주가에 영향을 미쳤는지 여부를 판단하기 위하여 비정상수익률과 누적 비정상수익률이 통계적으로 의미가 있는지를 밝히기 위하여 비정상수익률 및 누적 비정상수익률이 각 0과 다른지 t(누적 비정상수익률/누적 비정상수익률의 표준편차) 검정을 실시하였고, ㉱ 그 결과 위 사건기간 동안 비정상수익률의 t 통계량이 +1.65 이상 또는 -1.65 이하인 통계적 유의수준 5% 이상으로 나타난 날은 모두 17일(사건 전 기간 9일, 사건 후 기간 8일)이며, 그 중 사건 전 기간에 나타난 날에서 음(-)의 유의한 비정상수익률이 나타난 날은 3일(-40일, -39일, -34일)이고, 사건 후 기간에 나타난 날에서 음의 유의한 비정상수익률이 나타난 날도 3일(6일, 24일, 38일)에 불과하며, ㉲ 누적 비정상수익률의 경우 사건기간 동안에 단 하루도 t 통계량이 5% 유의수준에서 유의성이 있은 날이 없다고 인정하였고, ㉳ 이를 근거로 피고 대우전자의 분식회계 사실이 일반에 공표된 것이 피고 대우전자의 주가에 통계적으로 유의한 영향을 미치지 않았다는 결론을 도출하였다.

In addition, the research method of this case is also used for Korea Development Institute and International Policy Professors (No. 57). However, the former period is from October 6, 199 to October 25, 199; the latter period is from October 27, 199 to November 15, 199; the cumulative period is from May 3, 199 to October 5, 199; the total of 9 days from May 3, 199 to October 5, 199; the cumulative rate of 100 indices was 9.0 days from 9.0 to 9.0 days from 9.0 days from 99 to 9.0 days from 9.0 days from 1999 to 19.0 days from 9.0 days from 1999 to 19.0 days from 9.6 days from 1999 to 19.6 days from 199 to 19.

③ Interpretation and conclusion of the research results of the case

The result of the study of the above case was reported to the media on October 26, 1999 that the window dressing accounting of the defendant treatment electronics was not significantly significant (i.e.,, even if the window dressing accounting was not disclosed, the degree of the stock price decline was not significantly different from the actual ones). If the window dressing accounting facts are disclosed to the public, it would be normal that the stock price of the company concerned rapidly drops immediately or 1,2 days before the publication (as of February 4, 1998 to 42 days after the fact of window dressing accounting was conducted in the same manner as the result of conducting the research of the case on 42 companies which was disclosed, in view of the fact that the average abnormal profit and cumulative average profit rate were significantly significant).

B) The trend of the stock price change of the defendant treatment electronics

Until July 1999, the share price of the Defendant Daewoo Electronic has been gradually lowered to KRW 5,00 per share, and 1,945 won per share has been gradually declineded to KRW 1,95 on August 30, 199, and 1,500 to KRW 2,700 thereafter, which was first reported on October 26, 199 that was 1,590 won on October 27, 1999, the following day was more than KRW 1,620 won on October 27, 199, which was officially announced that the window dressing Accounting of the Defendant Daewoo Electronic was officially announced to KRW 1,885 won on November 4, 199, and more increased to KRW 245 won on the day before July 9, 199 that was the largest decline of the share price of the Defendant Daewoo Electronic. The period from September 1, 199 to September 9, 199.

[Reasons for Recognition] The entry of Evidence Nos. 48, 52, and 57 and the purport of the whole pleadings

(iii) the board;

A) Interpretation of Article 15 of the Securities and Exchange Act and burden of proof of damage connection

Article 186-5 and Article 197 of the Securities and Exchange Act, which applies mutatis mutandis to the liability for damages of this case pursuant to Article 15 (1) of the same Act, provides that the claimant shall deduct the disposal price if he/she disposes of the securities at the market price at the time of the closing of argument or (2) before the closing of argument. Paragraph (2) of the same Article provides that the person who shall be liable for damages shall not be held liable for partial damages if he/she proves that all or part of the claimant's damages were not caused by a false entry in the business report or audit report. This is the content that the burden of proof as to the absence of causation between the damage and the false disclosure is converted to the person liable for damages, and thus, in this case, the defendants must prove that there is no causation between the window dressing accounting of the defendant Daewoo Electronic and the plaintiffs' damages.

B) Determination of causation by the instant research method

(1) Whether the outcome of the case research conducted by deeming the “public announcement of the fact of window dressing accounting” as a case is appropriate.

The research results of the instant case considered the “public announcement of the fact of window dressing accounting” as the case and conducted the research of the instant case. In other words, comparing the stock price trends in the period known and affected by the false entry in the business report, etc. in the business report, etc. with the stock price trends in the affected period, and determined the causal relationship between the false entry in the business report and the amount of damages, etc. according

However, damages recognized pursuant to Articles 186-5 and 15 of the Securities and Exchange Act may be incurred by acquiring shares at a price higher than the share price that was formed in the absence of false statements in the business report, etc., or by acquiring shares due to false statements, although it could not have been acquired if there were no such false statements. Therefore, since the Plaintiffs had already suffered damages by purchasing shares of the Defendant treatment Electronic, it is not reasonable to grasp only the term “public announcement of the fact of window dressing accounting” as the so-called “case” in the research of the above case, and at least, the term “accounting fact” itself should be understood as the “case”.

In the case study, in order to determine the “public announcement of the fact of window dressing accounting” as the “case”, the fact that the window dressing accounting was conducted is not known in the market and thus cannot be reflected in the share price. However, since the fact that the window dressing accounting itself had already been reflected in a considerable portion of the share price through information on the unsound financial standing of the Defendant Daewoo-Electronic, such as different routes, for example, the restructuring plan, corporate improvement, etc., was already reflected in the share price, then the window dressing accounting did not sharply decline even after the disclosure of the fact.

(2) The change of the share price of the defendant treatment electronics until the fact of window dressing accounting is announced.

Before the publication of the window dressing accounting of the Defendant Treatment Electronic, the share price of the Defendant Treatment Electronic has fallen in large width. The reason for the decline can be seen as including the announcement of restructuring plan and corporate improvement work, etc., in addition to the window dressing accounting fact. However, since all of them are related to the financial status, it cannot be deemed that they are irrelevant to the window dressing accounting of the Defendant Treatment Electronic.

(3) Conclusion

Even if media reports on the window dressing accounting facts of the defendant treatment electronic have failed to have a statistical meaning on the share price of the defendant treatment electronic company (i.e.,, even if the window dressing accounting facts were not disclosed, the degree of decline in the share price was not significantly different from the actual ones), such circumstance or the trend of share price fluctuation of the defendant treatment electronic company cannot be readily concluded that there exists no causation between the fact of window dressing accounting of the defendant treatment electronic company and the damage suffered by the plaintiffs due to the price drop. Rather, the formation of share price of the defendant treatment electronic company should be deemed to have jointly affected multiple factors, including window dressing accounting, inasmuch as the defendants failed to prove that the plaintiffs' damage was not caused by the false entry in the business report or audit report, the above assertion by the defendants is without merit.

In addition, the above facts alone cannot be deemed to have proved that part of the damages suffered by the plaintiffs were damages not caused by the window dressing accounting, and therefore, the defendants' assertion that the share price drop due to factors without causation between window dressing accounting and window dressing should be deducted from the amount of damages is not reasonable.

(B) Loss related to the portion of shares sold before the fact of window dressing accounting is published.

1) The defendants' assertion

The plaintiffs sold part of the shares before the fact of window dressing accounting of the defendant Treatment Electronic was published. At the time of the sale, the fact of window dressing accounting of the defendant Treatment Electronic was not published to the general public, and thus the transaction was conducted on the basis of the share price already formed. Thus, even if the plaintiffs suffered losses, it cannot be deemed as losses arising from the false entry of the business report of this case or audit report of this case.

(ii) the board;

However, even prior to the announcement of the window dressing accounting of the Defendant Daewoo Electric, even before the announcement of the window dressing accounting, the share price of the Defendant Daewoo Electronic has fallen considerably. The reason for the decline includes not only the window dressing accounting fact but also the announcement of the restructuring plan and the corporate improvement work, etc., but all of them cannot be viewed as unrelated to the window dressing accounting. Thus, the share price decline before the announcement of the window dressing accounting cannot be deemed as losses without causation with the false entry of the business report of this case or the audit report of this case. Therefore, the Defendants’ aforementioned assertion is without merit.

(3) Calculation of damages

(A) Method of calculation

Under the current securities deposit and settlement system, when a specific securities are deposited at the Korea Securities Depository, it cannot be specified as being mixed with other securities of the same kind. Thus, in the case of selling and buying deposited securities, the seller or the purchaser does not specify the securities which are the purpose of the sale and purchase, and does not specify the type, issue, and quantity of the securities and make a transaction by designating only the type, issue, and quantity of the securities. Therefore, whether the stocks acquired by the Plaintiffs are disposed of or not is bound to specify the disposal stocks in accordance with the purport of Article 15 of the Securities and Exchange Act, which is statutory amount of damages for the protection of investors. The method can be deemed to be a method by which the stocks acquired first among the stocks owned by the Plaintiffs are first disposed of by the method by which the stocks acquired first are first disposed of, and thus, it is not unreasonable to deem the first acquired stocks to be first disposed of. Therefore, in

(B) Damages

1) A claim against Defendant 1 accounting corporation (a loss caused by false disclosure of the audit report of this case)

The damages for which the plaintiffs can claim compensation against the defendant 1 accounting firm due to the false disclosure of the audit report of this case are limited to the damages for the plaintiffs' share transactions that they acquired during the period from February 28, 1998 to November 4, 1999. The specific details of damages by each plaintiff are as shown in the "Plaintiff" and the "amount of damages" column in the attached Form 1.

2) Claim against the Defendant Treatment Electronic, 2, 3, and 4 (damage caused by false disclosure of the instant business report)

The damages for which the plaintiffs can claim compensation against the above defendants due to the false publication of the business report of this case are limited to the damages for the share transaction they acquired between March 31, 1998 and November 4, 1999. The specific damages by each plaintiff are as shown in the "Plaintiff" and the "amount of damages" column in the attached Table 1 (However, the damages by plaintiffs ○○○, ○○, ○○, ○○, ○○, ○○, ○○, ○○, and ○○, and ○○ are as stated in the "amount of damages" column 2 of the attached Table 1).

3) In some transactions, there is a case where the price increase and profit is left over at the time of disposal, and such profit is a profit derived from a series of stock transactions arising from a false disclosure and thus, it shall be deducted from the amount of damage.

[Based on the recognition] Gap evidence Nos. 4-1 to 348, Gap evidence No. 25-1 to 27, the fact-finding results of the first instance court's fact-finding on the Korea Stock Exchange, the purport of the whole pleadings

(C) Limitation of liability

At the time of the acquisition of the shares of this case, it is reasonable to limit the liability of the Defendants to 30% in consideration of the fact that the plaintiffs received a total of 7.60 million won from some of the directors, auditors, and the co-defendants of the first instance court, who were outside directors, by taking into account the fact that there was a problem in the financial situation or financial status of the Defendant Daewoo Electronic, and that there was a difference in the financial status of the Defendant Daewoo Electronic, and that the damages have been expanded by delay even if the share price has continuously fallen due to the continuous decline of the Plaintiff’s share price. Accordingly, it is reasonable to limit the liability of the Defendants to 30% in consideration of the fact that the plaintiffs received a reimbursement of total of 7.60 million won from some of the Co-defendants of the Defendant Daewoo Electronic, the acquisition time, amount, time, amount, and holding of shares by each of the plaintiffs, and that there is a difference in the number of shares acquired after the failure of the Plaintiffs, but in such a case, there is no room to uniformly reflect the damages of this case.

(D) Specific quoted amount

The amount of award by plaintiff is as stated in the separate sheet of "personal use amount 1" or "personal use amount 2" in the attached sheet of "personal use amount", and the detailed calculation details are as follows:

본문내 포함된 표 ？ 피고 2, 3, 4, 대우전자의 배상액 피고 1 회계법인의 배상액 원고들의 주식취득기간 1998. 3. 31.부터 1999. 11. 4.까지 1998. 2. 28.부터 1999. 11. 4.까지 손해액 ‘주식거래 및 손해내역 1’의 ‘손해액’란 기재금액(원고 10, 42, 101, 113, 182, 264, 325의경우는 ‘주식거래 및 손해내역 2’의 ‘손해액’란 기재금액) ‘주식거래 및 손해내역 1’의 ‘손해액’란 기재금액 책임제한비율 손해액의 30% 손해액의 30% 인용금액(손해액×책임제한비율) ‘인용금액표’ 중 ‘인용금액1’란 기재금액 ‘인용금액표’ 중 ‘인용금액2’란 기재금액

(e) Conclusion

Therefore, Defendant 1’s accounting firm stated in [Attachment 2]’s “The amount of delay damages” as stated in [Attachment 2] and the above stated “the amount of delay damages” as stated in [Attachment 1] and as stated above, Defendant 2’s annual interest rate of 10% from September 13, 2002, which is the day following the delivery date of a copy of the application for correction of claim of this case until January 18, 2006, which is deemed reasonable to dispute as to the existence or scope of such obligation. 5% per annum as stipulated in the Civil Act, and 20% per annum as stipulated in the former Act on Special Cases Concerning Expedition, etc. of Legal Proceedings until the full payment date after 30% per annum as stated in [Attachment 1] and 20% per annum as stated in [Attachment 3]’s annual interest rate of 30% from the day following the 20th day after the 19th day after the 20th day after the 20th day after the 3th day after the 20th day after the above ruling.

4. Conclusion

Therefore, the plaintiffs' claims and the claims against the defendant 1 accounting corporation of the plaintiff 2 (excluding plaintiff 2) against the plaintiffs (excluding plaintiff 2) are accepted within the scope of the above recognition, and they are dismissed as all of the claims against the plaintiffs 2, 3, 4, and the claims against the defendant 2, 3, and 4 and the remaining claims against the defendant 1 accounting corporation since they are without merit (the judgment of the court of first instance is divided into the main claims and the conjunctive claims against the defendant 2, 3, and 4, but this is nothing more than the main claims and conjunctive claims as to the liability for damages). Since the judgment of the court of first instance is unfair in conclusion differently, the defendants' appeals are partially accepted and the judgment of the court of first instance is modified as shown

Judges Park Jong-sung (Presiding Judge)