Samyoung ENC, Invalid Ruling on Appointment of Internal Directors Lee Seon-gi and Hwang Hye-kyung

[Asia Economy Reporter Jang Hyowon] The Busan District Court ruled on the 7th that the resolution to appoint Lee Seon-gi and Hwang Hye-kyung as inside directors, which was made at the shareholders' meeting, does not exist, in a lawsuit filed by Samyoung ENC's shareholders (plaintiffs) seeking confirmation of the non-existence of the shareholders' meeting resolution.

The key issue in this lawsuit was whether the exercise of voting rights delegated by former major shareholder Hwang Won at the shareholders' meeting was lawfully conducted and whether the resulting shareholders' meeting resolution holds legal effect.

The court stated, "It is confirmed that the resolution to appoint Hwang Hye-kyung and Lee Seon-gi as inside directors at the regular shareholders' meeting on March 28, 2019, does not exist," and "the plaintiff's claim is justified and is therefore accepted."

Since former representative Hwang Won was in a state of incapacity at the time of the delegation of voting rights, it cannot be considered that the delegation was lawfully made according to his true intention; thus, the proxy exercise of voting rights by the major shareholder Hwang Won is deemed invalid.

According to this decision by the court, unless the defendant company appeals the first-instance ruling, the registered director positions of Hwang Hye-kyung and Lee Seon-gi will be removed from the registry.

Representative Hwang Jae-woo stated, "This court ruling is seen as a turning point that can bring an end to the unfortunate management disputes caused by directors Lee Seon-gi and Hwang Hye-kyung."

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