Suit for Invalidity of Korea Exchange Bank’s Share Swap
Korea Exchange Bank got delisted on April 26, due to the share swap led by its major shareholder Hana Financial Holdings. This was only to sqeeze out the minority shareholders who owned 40% of the stocks, and in this course, minority shareholders’ interests were utterly ignored. The management claims the action was for the benefit of the minority shareholders but cannot provide a rational explanation on how exactly this will serve for the minority shareholders. Considering that just one year of delay of the share swap would exempt the shareholders from tax, the share swap was far from taking consideration for minority shareholders’ interest. Also, it was revealed that in deciding the share swap, a crucial decision for Korea Exchange Bank, there was no proper procedure for the fair price calculation. Eventually, it is to say that the purpose of this share swap cannot be justified and the action itself was full of flaws both substantively and procedurally. Therefore, based on article 360-14 of Commercial Law, the only basis for invalidating share swap, we came to file this “share swap invalidation law suit”.