"KCGI Loses Shareholder Derivative Suit Against Cho Won-tae and Others Over 'Losses from Unnecessary Borrowing'"

Korean Air passenger plane moving toward the runway at Gimpo Airport apron in Gangseo-gu, Seoul / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Daehyun] Grace Holdings, a subsidiary of the private equity fund KCGI, lost a shareholder derivative lawsuit filed against Chairman Cho Won-tae of Hanjin Group and others involved in the decision to increase short-term borrowings. A shareholder derivative lawsuit is a suit filed by shareholders on behalf of the company against executives who have unlawfully executed their duties against the interests of shareholders.

At 10 a.m. on the 7th, the Civil Division 30 of the Seoul Central District Court (Presiding Judge Han Seongsu) ruled against Grace Holdings in a 200 million KRW shareholder derivative lawsuit filed against Chairman Cho, Hanjin KAL CEO Seok Tae-soo, and five current and former outside directors. The court stated, "All claims of the plaintiff are dismissed," and "The plaintiff shall bear the litigation costs."

Earlier, KCGI claimed that the Hanjin KAL board of directors caused losses such as interest expenses to the company by raising an unnecessary 160 billion KRW in short-term borrowings at the end of 2018 to prevent the appointment of an independent auditor, and filed the lawsuit.

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