With signs that Jung-soo Kim, chief operating president of Samyang Foods, who was convicted in January last year of embezzling KRW 4.9 billion of company funds, was set to return as a registered director, minority shareholders pushed back, applying for an injunction for inspection and copying of the register of shareholders.
According to legal sources, on the 15th, the First Civil Division of the Seoul Northern District Court granted the application for an injunction for inspection and copying of the register of shareholders filed by A, a Samyang Foods minority shareholder, on the 11th, holding that "the claim is well founded."
Inspection and copying of the register of shareholders is a shareholder's request to the company to inspect and copy that register. Because it lets shareholders establish the company's ownership structure precisely, it is commonly exercised ahead of a control contest or collective shareholder action.
The shareholders sought copies because, with the employment restriction on President Kim lifted following his criminal conviction, he was set to return to a registered directorship at the general meeting of shareholders on the 26th.
President Kim was put on trial for violation of the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement) for taking approximately KRW 4.9 billion of company funds by passing off some materials supplied by an affiliate as having been supplied by a paper company. In January last year the Supreme Court upheld the lower court's sentence of two years' imprisonment, suspended for three years.
Following the conviction, President Kim, subject to an employment restriction, left Samyang Foods in March last year. His severance amounted to KRW 4 billion. He was also barred for two years from the completion of his sentence from being employed by any company connected to the offense.
The Ministry of Justice under former Minister Choo Mi-ae then lifted the employment restriction on President Kim, and he is returning to management just seven months after leaving.
Minority shareholder A said, "It makes no sense for a manager convicted of embezzling company funds to return to the business straight away," and added, "Even if President Jung-soo Kim returns, an objective oversight body must be put in place to prevent a recurrence of criminal conduct by management."
A went on: "For President Kim to return to the front line barely a year after his conviction and declare that he is strengthening ESG management is an insult to shareholders."
A and the other minority shareholders plan to use the register of shareholders they have now obtained to build support among minority shareholders, and to demand that the company's management be put right through a claim for inspection and copying of the accounting books and a derivative suit.
Attorney Younghoon Jung of Law Firm Changchun (41st class of the Judicial Research and Training Institute), who is acting in the case, said: "The era in which a founding family holding a small stake could run a company as it pleased in the name of ownership is over. It is time for management that pursues the interests of all shareholders."
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