Hyundai Card Vice Chairman Jung Tae-young Siblings' 'Accounting Records Lawsuit'... Supreme Court Rules in Favor of Younger Sister

1st and 2nd Trials: "Reasons for Inspection and Copy Request Do Not Raise at Least a Rational Doubt"
Supreme Court: "Sufficient if Circumstances and Purpose Are Specifically Stated to Verify Accounting Books, etc."

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that when a shareholder suspects that a company's management has violated laws or the articles of incorporation and requests to inspect or copy accounting books, it is sufficient to provide a specific explanation of the circumstances and purpose.

The Supreme Court's Third Division (Presiding Justice Kim Jae-hyung) announced on the 31st that it overturned the lower court's ruling, which dismissed the appeal by Jung Eun-mi, the younger sister of Jung Tae-young, Vice Chairman of Hyundai Card, in the case where she sued Seoul PMC (formerly Jongno Academy) for inspection and copying of accounting books, and remanded the case to the Seoul High Court.

Jung, a minority shareholder of Seoul PMC with a 17.38% stake, demanded to inspect and copy the accounting books to identify any improper fund execution or violations of laws and articles of incorporation by Vice Chairman Jung Tae-young, the major shareholder and inside director, and other management members, and to hold them accountable. When Vice Chairman Jung and others did not comply, she filed a lawsuit.

Both the first and second trials dismissed Jung's request and ruled in favor of Seoul PMC. The courts held that the claim for inspection and copying by a minority shareholder must be stated to the extent that it raises a reasonable suspicion that the claim might be true. However, the reasons Jung specified did not raise even the minimum reasonable suspicion that "there might be misconduct by the management."

However, the Supreme Court judged that it is sufficient if the circumstances and purpose are described in detail enough to confirm the scope of the accounting books and documents to be provided for inspection and copying.

The court stated, "It is not necessary to describe the reasons to the extent that a reasonable suspicion arises that the reasons (such as the circumstances of the request) might be true or to attach materials supporting the reasons. However, if the reasons are clearly false or the purpose is improper, the request cannot be considered lawful, and inspection and copying cannot be permitted."

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