The Third Class Action Suit in Relation to C-Motech Co.

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C-motech Co.(“the company”) did capital increase in the amount of 28.7 billion won in January, 2011; however, not long after the capital increase, the company filed bankruptcy in April, 2011, and went out of KOSDAQ on September, 2011. Meanwhile, Hannuri Law found out that there was significant problem with the filing document in regards to the capital raise in January, 2011. Accordingly, investors who participated in the 2011 January capital raised this class action suit against Dongbu Securities Co. which was the principal underwriter of the 2011 January capital, and this class action suit is the third securities class action suit after Securities-Related Class Action Act became effective on January 1, 2005.


The Supreme Court rejected both the plaintiffs and the defendant's appeal and upheld the partial ruling (recognition of the defendant's 10% liability for damages) by the Seoul Southern District Court on July 13, 2018(Seoul Southern District Court 2011gahap19387ho) and the Seoul High Court on February 5, 2019. Thus, the Supreme Court's ruling confirmed the original verdict, but limited the defendant's responsibility to 10% of the damages to members. For distribution under the Securities-Related Class Action Act, firstly the appointment of distribution administrators should be made. Secondly, the distribution plan should be approved and lastly the process of reporting rights and verifying rights must be carried out. It is expected to take about 8 to 12 months for compensation to be distributed to clients after the above procedure is legally completed.