[Exclusive] "Travel Agency Taken by Hyundai Group 40 Years Ago" Loses First Trial in Ownership Confirmation Lawsuit

1977 Middle East Construction Boom... Hyundai Construction Requires Air Transport Agency License
Shim Jae-seop, Former CEO of Jayu Air, "Jung Ju-young's Side Took Corporate Seal While I Was on a Business Trip"

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[Asia Economy Reporter Kim Daehyun] In the mid-1970s, former Freedom Air CEO Shim Jaeseop filed a lawsuit claiming that Hyundai Group took away his travel agency, but he lost in the first trial.

According to the court on the 2nd, the 17th Civil Division of the Seoul Central District Court (Presiding Judge Kim Seongwon) recently dismissed all claims and ruled against former Freedom Air CEO Shim in a lawsuit for confirmation of ownership filed against Hyundai Department Store Honorary Chairman Chung Mong-geun and others.

According to former CEO Shim's claim, in 1977, he made a preliminary contract to acquire 70% of Freedom Air's shares with the late Chung Ju-yung, founder of Hyundai Group, former President Lee Myung-bak (then president), former director Park, and former deputy Na (contract manager). At that time, Hyundai needed a license for air transportation agency business for Freedom Air as it was sending about 10,000 workers to overseas construction sites. In return, they agreed to pay 300 million KRW in cash and one apartment.

However, former CEO Shim claims that while he was away on a business trip overseas that year, Hyundai Group took over the company. He alleges that only 80 million KRW of the deposit was received, and without a formal contract being signed, Hyundai Group staff came to the Freedom Air building and took the corporate seal, resignation letter of the CEO, and other necessary documents for company transfer without permission.

In 2020, former CEO Shim filed a lawsuit stating, "The rightful payment for the stock transfer was not made, and the stock transfer contract was signed under coercive methods, making it 'invalid.' Chairman Chung, who acquired all shares of Freedom Air, must return them all." He also demanded, "Hyundai Department Store should change the name on 64,000 shares owned by Chairman Chung to former CEO Shim, and Hyundai Green Food should change the name on 160,000 shares owned by Chairman Chung to former CEO Shim, and Chairman Chung must pay 783 million KRW."

However, the court did not accept former CEO Shim's claims, stating, "It does not appear that the stock transfer was carried out by coercive methods against the will." The court judged that the corporate seal and documents were handed over by former CEO Shim's son, and former CEO Shim himself was preparing the necessary procedures for management transfer.

The court acknowledged that former CEO Shim repeatedly requested contract fulfillment and penalty payments from former deputy Na but added that this was a demand for the fulfillment of a valid contract, not evidence that the stock transfer was carried out by coercive methods. The court also found that former deputy Na's related testimony was based on information received from former CEO Shim's side and was difficult to fully trust.

The court ruled, "Even if there was illegality in the formation process of the legal act, it is difficult to consider the stock transfer contract itself as void as an act against public order solely based on that circumstance," and "It is hard to accept exercising stock rights after about 40 years since the stock name was changed."

Former CEO Shim appealed against this ruling.

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