Kyobo Life Put Option Dispute, International Arbitration Hearing Procedure Begins on the 15th

[Asia Economy Reporter Hyungsoo Park] Shin Chang-jae, chairman of Kyobo Life Insurance, and financial investors (FI) are starting a fierce battle at the international arbitration tribunal.

According to Kyobo Life Insurance and the financial investor (FI) Affinity Consortium on the 14th, the hearing procedure for the International Chamber of Commerce (ICC) arbitration trial concerning the shareholders' agreement (SHA) on the stock put option signed between Chairman Shin and Affinity will be held online from the 15th.

The hearing procedure was originally scheduled for September last year but was postponed due to the impact of COVID-19.

The ICC arbitration trial began in March 2019 at Affinity's request.

The Affinity Consortium is the FI that Chairman Shin brought in as a "white knight" when Daewoo International sold 24% of Kyobo Life Insurance's shares in 2012. Affinity, IMM PE, Baring PE, and the Singapore Investment Corporation participated.

In September 2012, Affinity signed a shareholders' agreement including a put option with Chairman Shin. Affinity claimed that Chairman Shin promised to conduct an initial public offering (IPO) by September 2015 but broke the promise, making it difficult to recover the investment. In October 2018, Affinity exercised the put option and proposed a sale price of 409,912 KRW per share.

Chairman Shin's side did not recognize the exercise of the put option, claiming it was invalid. Chairman Shin argued that when calculating the fair market value (FMV) of the put option, accountants from Deloitte Anjin Accounting Corporation deliberately applied the valuation date in a way favorable to Affinity. In April last year, he reported them to the prosecution, and the prosecution indicted three accountants and corporate officials affiliated with Affinity on charges of violating the Certified Public Accountant Act.

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