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Kyobo Life chairman has yet to pay investors’ arbitration expenses Shin Chang-jae has to pay $12 mil to Affinity consortium following ICC’s September ruling

Translated by Ryu Ho-joung 공개 2021-11-30 08:14:01

이 기사는 2021년 11월 30일 08:06 더벨 유료페이지에 표출된 기사입니다.

Doubts are rising about the real intention behind Koyo Life Insurance chairman Shin Chang-jae’s plan to take the company public amid increasing financial pressure on Shin who has to pay more than $25 million in legal costs from his own personal pocket following a September ruling by the International Chamber of Commerce (ICC).

Shin has to pay all costs and 50% of attorney fees to the South Korean insurer’s financial investors based on the ICC’s decision on the arbitration case between him and the investor group.

The investor group – consisting of Affinity Equity Partners, IMM Private Equity, Baring Private Equity Asia and Singapore’s GIC – immediately claimed over 15 billion won ($12.6 million) in total expenses, but received no response from Shin.

Kyobo Life argues that Shin does not intentionally avoid paying the investors, saying that he is waiting for “a payment order from a local court”.

The Kyobo Life chairman is said to face a total of 30 billion won or more in legal bills including his own costs and attorney fees for the arbitration case.

Shin and Kyobo Life announced earlier this month a plan to restart the company’s initial public offering process, asking for cooperation from the investors.

Shin said Kyobo Life “would meet all listing qualifications set by the Korea Exchange once the Affinity consortium’s provisional seizure of shares is lifted” so as to satisfy a lock-up condition applied to the largest shareholder and other major shareholders, implying that the company’s IPO would be able to go ahead only after the investor group releases the freeze of his assets.

Shin is Kyobo Life’s largest shareholder with a 33.78% stake at the end of September. The Affinity-led investor group was permitted by a Seoul court in early 2020 to provisionally seize Shin’s shares and house after he refused to buy back the company’s shares from the investors who exercised put options included in the shareholder agreement in October 2018.

The investor group acquired a minority stake in Kyobo Life in 2012 with put options enabling them to sell their stakes to Shin if it failed to go public by 2015.

Besides the fact that Shin owes the investors millions of dollars in legal fees and costs, the domestic legal battle between the two parties has only escalated over the last two years, making the Affinity consortium unwilling to lift its provisional seizure only because of Shin’s IPO plan.

Shin filed a request in September with the Seoul Northern District Court to cancel the provisional seizure of his assets, with the first hearing held on October 14. The court has not ruled on the case yet. (Reporting by Gyoung-tae Kim)
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