Kyobo Life Foot Option Legal Battle Intensifies... Pretrial Hearing Scheduled for the 29th

[Asia Economy Reporter Ki Ha-young] The legal battle over the put option (stock purchase right) dispute between Shin Chang-jae, chairman of Kyobo Life Insurance, and the financial investor (FI) Affinity Consortium is set to intensify. The prosecution has indicted the accounting firm that calculated the put option price and the FI for allegedly inflating Kyobo Life Insurance's value unfairly.

According to industry sources on the 7th, the trial for key executives of the Affinity Consortium and accountants from Deloitte Anjin Accounting Firm, who were indicted by the prosecution for violating the Certified Public Accountant Act, is scheduled to begin with a preparatory hearing on the 29th.

Earlier, in April last year, Chairman Shin's side filed a complaint with the prosecution, alleging that accountants from Deloitte Anjin Accounting Firm deliberately applied the evaluation reference date in a way favorable to Affinity when calculating the fair market value (FMV) of the put option.

Accordingly, in January, the prosecution indicted key executives of the Affinity Consortium and accountants from Deloitte Anjin Accounting Firm without detention, judging that they received illicit solicitations, accepted bribes, promised benefits equivalent to legal fees, and conspired to enable the Affinity Consortium to obtain unfair financial gains through improper means.

The core issues in the upcoming trial are expected to be whether there was inappropriate collusion between the Affinity Consortium and Anjin Accounting Firm, and whether the Affinity Consortium's illicit solicitation and Anjin Accounting Firm's false reporting of fair value in response to it occurred.

Meanwhile, Chairman Shin and the Affinity Consortium are currently undergoing arbitration proceedings under the International Chamber of Commerce (ICC) International Court of Arbitration regarding the exercise of the put option. Both parties participated in a five-day in-person hearing hosted by the International Court of Arbitration from the 15th to the 19th of last month to present their final arguments.

The Affinity Consortium, composed of Affinity, IMM PE, Baring PE, and the Singapore Investment Corporation, exercised the put option on October 2018 at 409,000 KRW per share (totaling 2.0122 trillion KRW) to recover their investment after Chairman Shin failed to conduct an initial public offering (IPO) by the contractually promised date of September 2015. Chairman Shin's side refuses to acknowledge the exercise of the put option, claiming the price calculation is absurd. The FI signed a shareholder agreement including a put option with Chairman Shin in July 2012 during the acquisition of 24% of Kyobo Life Insurance shares held by Daewoo International in 2012.

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