LG Stockholders’ Derivative Action
In this case, a domestic conglomerate forced its subsidiaries to sell their own stocks to the conglomerate’s family at a substantially low price, inflicting a significant loss on the subsidiaries. In response, the stockholders raised a lawsuit claiming that the directors of LG should take responsibility of the situation. The family and relatives of Goo Bon Mu, chairman of LG Group not only bought 27.44 million shares of LG Petroleum & Chemicals at a minimum price of 3,000 won, brining in an enormous gain in June 1999, but also resold the stocks in the market or even back to the LG Chemicals during January 2002 to December 2002, pocketing at least 190 billion won in capital gains. In this lawsuit, South District Court found that the above directors should cough out about 40 billion won as compensation, which became the final ruling without any appeals from the directors.