Background
In the exercise of appraisal rights, in dissenting shareholder claims on mergers and business transfers, and in related-party transactions, what figure is taken as the "fair value" of unlisted shares determines everything. That figure depends heavily on accounting and appraisal results, and a single change in method or assumption can move the conclusion by several — or several dozen — times. Changchun has acted in many such share valuation disputes.
The Issue — Should an "Appraisal Result" Simply Be Accepted?
A court appraisal, or a valuation submitted by the other side, carries an air of authority — but it rests on countless assumptions: the valuation date, discount rate, capitalization rate, comparables, weightings, the treatment of one-off gains and losses. Shake those assumptions and the conclusion shakes with them.
How Changchun Helped
Changchun (attorneys Jaesun Yoon and Jonghwa Kim) does not take appraisals and valuations at face value but tests their premises and methodology critically, line by line. We examine ① whether the valuation date and the company's condition at that date are accurately reflected; ② whether the weighting and formulae for net profit value and net asset value are appropriate; ③ whether one-off, incidental or non-recurring items have been improperly included; and ④ whether the choice of key variables such as comparable companies and discount rates has a reasonable basis — exposing errors in the calculation through appraisal applications and written opinions.
Share valuation disputes are decided not by the "numbers" themselves but by who tests the assumptions beneath them more precisely. Changchun protects our clients' value with expertise accumulated in disputes over the proper valuation of unlisted shares. (Outcomes may differ depending on the facts of each matter.)