Hannuri successfully represented Align Partners Capital Management in obtaining an provisional disposition against Finda’s voting rights JB Financial Group 2024 AGM.

   Hit. 422
Date. 2024.04.08   


On March 26, the Jeonju District Court issued judgement ordering a provisional disposition against JB Financial Group(“JBFG”) and Finda, Inc., which was filed by Hannuri Law LLC on behalf of Align Partners Capital Management(“APCM”). The court found that JBFG shares held by Finda constitutes cross ownership of shares and therefore exercise of its voting rights violates Commercial Act.

 

Hannuri has been providing legal advice on shareholder activism campaigns against domestic financial holding companies on behalf of APCM, and this case is part of the campaign against JBFG.

 

In our campaign, whether JBFG shares held by fintech company Finda constitute cross owned shares restrictions under Commercial Act became an important issue. Commercial Act article 369 (3) stipulates, ‘where a company and its subsidiary company together holds more that 10% of issued shares of another company, such another company shall have no voting rights for shares it holds.’ Although JBFG’s wholly owned subsidiaries directly held 10% of Finda’s shares, they additionally held another 5% shares through ‘New Technology Business Investment Association (defined in Specialized Credit Finance Business Act)’. In our case, who (‘which legal person’) owns this 5% shares were main legal issue since legal nature of such investment association was obscure. 

 

Hannuri successfully persuaded the court that JBFG subsidiaries are subjects that hold the 5% shares through a partnership-ownership. Moreover, Hannuri explained JBFG shares held by Finda is significant enough to influence the outcome of the 2024 AGM, resulting in a timely and favorable decision from the court. 

 

This is the first case to obtain a provisional disposition prohibiting voting rights based on the cross-owned shares restriction clause. The decision contains important legal precedents on the application of this clause in the practice. For instance, the court explicitly stated Commercial Act article 369 (3) is applicable when companies hold another company’s shares through partnership-ownership.  

 

Hannuri is committed to continue to create leading cases that contribute to the protection of shareholder voting rights and the improvement of corporate governance structures.