Supreme Court Confirms Not Guilty Verdict for Anjin Accountants on ‘Kyobo Life Put Option Overvaluation’ Charges

The acquittal of the Deloitte Anjin Accounting Firm accountants who were prosecuted for violating accounting standards by overvaluing the put option (stock purchase claim right) price of Kyobo Life Insurance has been finalized.

According to the legal community on the 29th, the Supreme Court's First Division (Presiding Justice Oh Kyung-mi) upheld the lower court's ruling that acquitted three Anjin accountants and two Affinity Consortium (Affinity) officials who were indicted for violating the Certified Public Accountant Act.

Shin Chang-jae, chairman of Kyobo Life Insurance, signed a shareholder agreement including put option rights with the financial investor (FI) Affinity Consortium, which purchased Kyobo Life shares held by Daewoo International in 2012.

The main content was that Affinity would acquire 24% of Kyobo Life shares at 245,000 won per share. However, if Kyobo Life's initial public offering (IPO) was not completed by September 2015, Affinity had the right to exercise the put option to sell the Kyobo Life shares acquired at 245,000 won per share back to Chairman Shin.

After the IPO was delayed, Affinity decided to exercise the put option in October 2018 and appointed Anjin Accounting Firm as the put option price evaluation agency. Anjin Accounting Firm prepared a valuation report stating that the value per share of Kyobo Life stock was 410,000 won.

Chairman Shin then reported the Anjin accountants to the prosecution, alleging that Anjin deliberately overvalued the put option exercise price. The prosecution charged Anjin executives and others, alleging that Anjin colluded and conspired with Affinity to falsely report the fair value of Kyobo Life shares during the process of claiming the put option from Chairman Shin.

However, both the first and second trials acquitted them, stating, "There is no objective evidence to believe that Anjin prepared the valuation report under Affinity's unilateral instructions without professional judgment, and there was no fraudulent solicitation or bribery." The Supreme Court also found no problem with the lower courts' judgment.

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