'Kyobo Life Put Option Evaluation' Affinity and Anjin Employees Also Acquitted in Second Trial

[Asia Economy Reporter Kim Daehyun] Accountants from Anjin Accounting Corporation and private equity fund Affinity Consortium officials, who were accused of conspiring to inflate the exercise price during the valuation process of Kyobo Life Insurance's put option (the right to sell shares at a specific price), were acquitted again in the appellate court.

On the morning of the 1st, the Seoul High Court Criminal Division 1-1 (Presiding Judges Lee Seungryeon, Eom Sangpil, Shim Dam) delivered a verdict of not guilty to two Affinity employees and three accountants from Anjin Accounting Corporation, who were indicted for violating the Certified Public Accountant Act, in the appellate trial, the same as in the first trial.

The court stated, "There is no objective evidence to conclude that the valuation work was carried out solely under Affinity's unilateral instructions without the professional judgment of Anjin accountants." This means the court did not accept the prosecution's claim that "Affinity instructed to use only valuation methods favorable to themselves, and Anjin accountants simply followed these instructions."

Seoul High Court and Seoul Central District Court, Seocho-gu, Seoul.

Earlier, Kyobo Life Insurance claimed, "Anjin intentionally set a higher price by violating standards in the process of calculating the fair market value (FMV) corresponding to the put option price held by Affinity, a financial investor (FI)," and reported them to the prosecution in April 2021.

The prosecution viewed that Affinity unduly intervened in Anjin's valuation process during the process of recovering investment funds for its 24% stake in Kyobo Life Insurance and brought the case to trial. It was alleged that through collusion between Affinity and Anjin, the put option exercise price per share of Kyobo Life Insurance was raised to 409,000 won, more than twice the market value. The prosecution requested the court to sentence the defendants to imprisonment ranging from one year to one year and six months.

On the other hand, Anjin argued, "The accountants communicated with the client in the usual manner performed during typical valuation tasks while valuing Kyobo Life Insurance. We did our best to derive objective valuation results."

The first trial also acquitted all defendants. It explained, "If other valuation methods not used by Anjin were applied, a higher price of 429,000 won would have resulted," and added, "It appears that various valuation approaches within a possible range were applied, and it is difficult to see that only methods favorable to Affinity were used."

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