Appraisal Rights Action of HEC(Hyundai Engineering)
In the course of merging Hyundai AMCO into itself, HEC (Hyundai Engineering) evaluated its value far below the fair value, and dissenting shareholders of HEC who opposed to the merger exercised their appraisal rights against HEC.
HEC adopted and suggested 403,586 Korean won per a stock of HEC as the purchase price for the dissenting shareholders, which the trial court decided to be fair. The price, however, was calculated to evaluate the merger ratio of HEC and Hyundai AMCO, and thus intrinsically different from the purchase price of HEC stock. In detail, the price was calculated based on ① 2012 financial statements whose numbers were over one year earlier than the correct decision date (Jan. 15, 2014) of the purchase price, ② incorrect revenue projection which is one of the most important factor in evaluation of DCF (Discount Cash Flow), ③ unreasonable capital cost, and etc.
Thus, the dissenting shareholders appealed to the appellate court to decide fairly the purchase price of HEC considering the financial status and the business characteristics.