Kyobo Life Put Option Dispute, International Arbitration Hearing to Be Held This Week

FI "Exercise of Put Option According to Contract"
Kyobo Life Insurance, Accounting Firm, and Others Prosecuted
Conclusion Expected Around September

[Asia Economy Reporter Ki Ha-young] The international arbitration trial to conclude the put option (stock purchase right) dispute between Shin Chang-jae, chairman of Kyobo Life Insurance, and the financial investor (FI) Affinity Consortium will be held this week.

According to the financial sector on the 14th, the International Chamber of Commerce (ICC) arbitration hearing procedure regarding the shareholder agreement on the stock put option between Chairman Shin and Affinity will be conducted via video conference from the 15th to the 19th.

This ICC arbitration trial began in March 2019 at Affinity's request. The Affinity Consortium, consisting of Affinity, IMM PE, Baring PE, and the Singapore Investment Corporation, acquired a 24% stake in Kyobo Life Insurance held by Daewoo International in 2012. During this process, the FI signed a shareholder agreement including a put option with Chairman Shin in July 2012.

After the put option agreement was signed, since Chairman Shin did not conduct an initial public offering (IPO) by the contractually promised date of September 2015, the FI exercised the put option on October 2018 at 409,000 KRW per share (totaling 2.0122 trillion KRW) to recover their investment.

In response, Chairman Shin's side did not acknowledge the exercise of the put option, arguing that the price calculation was absurd. Furthermore, in April last year, Chairman Shin filed a complaint with the prosecution, claiming that the accountants from Deloitte Anjin Accounting Corporation deliberately applied the evaluation date in a way favorable to Affinity when calculating the fair market value (FMV) of the put option. Recently, the prosecution indicted three accountants from Anjin Accounting Corporation and corporate officials from Affinity on charges of false reporting and violations of the Certified Public Accountant Act.

The final decision of the arbitration court is generally known to take about six months after the hearing. The ICC arbitration trial operates as a single-instance system.

This content was produced with the assistance of AI translation services.