[Asia Economy Reporter Kim Hyung-min] Citizens' lawsuits are mounting regarding the Daejang-dong public development project in Seongnam City, Gyeonggi Province, where suspicions of preferential treatment have arisen due to unreasonable excessive dividends.
According to the legal community on the 26th, nine Seongnam citizens, including Mr. Kim, filed a lawsuit on the 20th at the Suwon District Court Seongnam Branch against the special purpose company (SPC) 'Seongnam Eutteul' for the Daejang-dong development, requesting confirmation of the invalidity of the dividend resolution.
Attorney Lee Ho-seon, representing Mr. Kim and others, stated in the complaint, "Seongnam Urban Development Corporation, which invested 2.5 billion KRW, received dividends of 183 billion KRW over three years, whereas Hwacheon Daeyu and SK Securities, which invested 350 million KRW, received dividends of 404 billion KRW."
He added, "The defendant did not pay preferred shareholders, who contributed more than seven times the amount of common shareholders, even half the amount (0.45 times) of the common shareholders' dividends. Such an unreasonable dividend resolution violates laws and is fundamentally invalid."
Earlier, in December last year, 38 original residents of Daejang-dong, and in August last year, another five residents filed lawsuits against Seongnam Eutteul to recover unjust enrichment.
They are known to argue that it is unacceptable for the private company Seongnam Eutteul to have gained enormous profits by expropriating land at compensation prices lower than market value under the pretext of public development.
In March last year, nine original residents of Daejang-dong also filed a lawsuit against Seongnam Eutteul to confirm the non-existence of debt. They had planned to purchase apartments after land expropriation, but opposed the fact that Seongnam Eutteul set prices based on appraised value rather than the actual cost of development, resulting in significantly higher costs.
The ruling for this lawsuit will be announced on the 30th at the Suwon District Court Seongnam Branch.
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