Kyobo Life FI Files Second Arbitration Request Against Chairman Shin Chang-jae

Kyobo Life Insurance

[Asia Economy Reporter Changhwan Lee] The financial investor (FI) consortium engaged in a dispute over the 'put option (the right to sell at a specific price)' with Shin Chang-jae, Chairman of Kyobo Life Insurance, is attempting to recover its investment by filing for international arbitration again.

The Affinity Consortium (hereafter Affinity) announced on the 2nd that it filed for arbitration with the International Chamber of Commerce (ICC) on the 28th of last month, requesting Chairman Shin to fulfill his put option obligations.

This comes about five months after their attempt to recover the investment through ICC arbitration in 2019 was effectively rejected by the ICC's dismissal decision in September last year.

In the second arbitration, FI members including Affinity explained that, according to the contractually agreed procedures, they will first require Chairman Shin to select their own appraisal institution and submit an appraisal report on Kyobo Life Insurance's fair market value (FMV). Subsequently, based on the final FMV calculated through follow-up procedures, they will claim payment of the put option price from Chairman Shin.

They also plan to claim compensation for damages incurred due to Chairman Shin's breach of contract and unjustified delay in fulfilling his obligations.

Affinity emphasized, "Following the ICC arbitration and a domestic court ruling?which clearly determined that Chairman Shin has put option obligations (amid the indictment of Affinity officials and accounting firm accountants)?Chairman Shin continues to refuse to fulfill them. We have inevitably filed for the second arbitration to enforce compliance."

The Affinity Consortium consists of Affinity Equity Partners, IMM PE, Baring PE, and the Singapore Investment Corporation. These investors were introduced by Chairman Shin as friendly shareholders when Daewoo International sold a 24% stake in Kyobo Life Insurance in 2012.

Affinity stated that Chairman Shin broke his promise to conduct an initial public offering (IPO) by September 2015, making it difficult to recover their investment. Therefore, in October 2018, they exercised the put option and submitted a price of 409,912 KRW per share (totaling 2.0122 trillion KRW) the following month.

When Chairman Shin claimed that Affinity's put option exercise was invalid and refused to acknowledge it, Affinity filed for ICC international arbitration in March 2019.

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