Shin Chang-jae, Chairman of Kyobo Life Insurance, Wins Again Against KLI in Put Option International Dispute

[Asia Economy Reporter Changhwan Lee] Shin Chang-jae, chairman of Kyobo Life Insurance, has won again in the put option (the right to sell shares at a specific price) dispute with financial investors.

Kyobo Life Insurance announced on the 13th that the International Chamber of Commerce (ICC) arbitration tribunal ruled that Chairman Shin has 'no obligation to purchase' in the international arbitration lawsuit filed by KLI regarding the put option.

Following the international arbitration lawsuit with the Affinity Consortium (Affinity) in September last year, the arbitration tribunal also ruled in favor of Chairman Shin in the dispute with KLI.

KLI, a financial investor holding 5.33% of Kyobo Life Insurance shares, exercised the put option against Chairman Shin in November 2018. This was about a month after Affinity exercised its put option.

In this international arbitration lawsuit, the arbitration tribunal judged that Chairman Shin has no obligation to accept the put option price of 397,893 KRW per share proposed by KLI.

The basis for this judgment was the presentation of an improper Fair Market Value (FMV) calculation. The FMV should have been calculated as of November 2018, the date of the put option exercise, but since it was calculated based on September 2018, the tribunal ruled that Chairman Shin has no obligation to purchase the shares.

In the previous arbitration ruling with Affinity, the FMV reflected as of June 2018 (409,912 KRW), not October 2018, the put option exercise date, was also dismissed.

The arbitration tribunal also stated that Chairman Shin is not liable for damages due to breach of the shareholders' agreement. This is the same result as the international arbitration tribunal filed by Affinity against Chairman Shin. In September last year, the arbitration tribunal stated in the dispute between Chairman Shin and Affinity that "Chairman Shin is not responsible for fulfilling the put option obligation or paying interest."

Kyobo Life Insurance said, "The arbitration tribunal has consecutively ruled that Chairman Shin does not have to comply with unfair put options," and added, "We hope that the damage to shareholders and corporate value caused during the dispute process will be normalized and that a fair valuation can be received."

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