[Asia Economy Reporter Kim Daehyun] Singer Park Hyoshin, who filed a lawsuit to maintain the control of the second largest shareholder of his former agency, won the first trial.
According to the court on the 26th, the Seoul Central District Court Civil Division 31 (Presiding Judge Kim Jisuk) recently ruled in favor of the plaintiffs in the first trial of the lawsuit filed by Park and others against their former agency Glove Entertainment, challenging the issuance of new shares.
Park and others are the 2nd and 3rd largest shareholders, holding 39.37% and 10.76% of Glove Entertainment's shares, respectively. They filed the lawsuit in February last year, disputing the company's decision to hold an extraordinary shareholders' meeting and approve a third-party allotment of new shares worth 100 million KRW. The claim was that the former largest shareholder and ex-CEO allocated new shares to a friendly party to defend management rights.
Park and others argued, "If the issuance of new shares to a third party is confirmed, the plaintiffs' shareholding ratio will drop from the existing 50.13% to 37.48%, causing a significant change in control rights, and the existing shareholders' preemptive rights to subscribe to new shares will be unfairly infringed."
Furthermore, they pointed out, "Although it is claimed to be a decision to raise operating funds for the company, even if such a need exists, it must be confirmed that it is difficult to raise funds in a timely manner through a rights offering to shareholders."
The first trial ended without opposition as the agency did not respond at all. The court ordered the nullification of the new share issuance. According to the Civil Procedure Act, if the defendant does not submit a written answer within 30 days from the date of service of the complaint copy, it is considered an admission of the facts constituting the claim, and a default judgment can be rendered.
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