Legal Battle Over Kyobo Life Value Assessment Intensifies... 'Put Option Dispute' Variable

[Asia Economy Reporter Oh Hyung-gil] The legal battle over the corporate valuation triggered by the put option conflict between Shin Chang-jae, chairman of Kyobo Life Insurance, and Kyobo Life Insurance’s financial investor (FI), the Affinity Consortium, has begun. The future direction of the put option dispute hinges on whether the accountant raised the stock valuation of Kyobo Life Insurance under the direction of Affinity.

On the 20th, the first trial session was held at the Seoul Central District Court Criminal Division 22 (Presiding Judge Yang Cheol-han) for three accountants from Anjin Accounting Corporation and two Affinity Consortium officials, who were indicted on charges of violating the Certified Public Accountant Act in relation to the Kyobo Life Insurance put option dispute.

During the trial, the prosecution and defense fiercely debated whether there was inappropriate collusion between the Affinity Consortium and Anjin Accounting Corporation.

Affinity and Anjin Accounting Corporation denied the charges, claiming that "the indictment itself regarding the valuation report is highly unusual."

The prosecution countered, stating, "The valuation report prepared by Anjin Accounting Corporation cannot be seen as an independent and expert opinion," and presented email evidence showing that Anjin deliberately inflated the valuation results under the instructions of the investor, Affinity.

The prosecution argued that Affinity Consortium instructed Anjin Accounting Corporation at least seven times via email to revise the evaluation methods, progressively increasing the valuation results intentionally. Each time the evaluation parameters were modified under Affinity’s direction, Anjin’s accountants sent the updated results, which led to the per-share valuation rising from the 200,000 KRW range to over 400,000 KRW, according to the prosecution’s assessment.

The email evidence presented by the prosecution included content showing that the defendants mutually agreed early in the valuation report preparation to produce results favorable to themselves. The emails explicitly stated that "since the likelihood of litigation is high, we should use every possible favorable method to increase the results."

Additionally, the emails revealed that Affinity Consortium was directly involved in creating the list of materials to be requested from Kyobo Life Insurance and led the entire valuation process.

Even in the final price determination, Affinity Consortium emailed Anjin’s accountants requesting a summary table of the prices calculated under different scenarios, stating, "Once this is completed, Affinity Consortium will internally discuss and decide on the price."

Based on this evidence, the prosecution pointed out, "The valuation report prepared by Anjin Accounting Corporation cannot be considered independent and expert," and accused that "during the preparation of the valuation report commissioned by Affinity Consortium, Anjin’s accountants engaged in improper solicitation, bribery, and false reporting."

In response, Anjin argued, "We only performed simple calculation tasks according to the investors’ instructions." The defense claimed, "The indictment itself regarding the valuation report is highly unusual," and argued that "reflecting the client’s reasonable opinions is a normal business process, and the indemnity clause covering legal fees is also standard," denying the defendants’ charges.

Their second trial session is scheduled for the 10th of next month.

Meanwhile, on the 10th, a trial was held for an accountant from Samdeok Accounting Corporation, who was indicted on charges of falsely reporting Kyobo Life Insurance’s corporate valuation.

The accountant is accused of quoting and adopting the evaluation methods and amounts from the report prepared by Anjin Accounting Corporation without correcting even simple errors during the corporate valuation work commissioned by Kyobo Life Insurance FI Appalma Capital. Additionally, the accountant was indicted for violating the Certified Public Accountant Act by describing that necessary materials were not provided without requesting them from Kyobo Life Insurance and inflating the service period.

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