Taekwang Lee Hojin Wins Second Trial Against Sister in 'Nominee Inheritance' Lawsuit

Court: "Ownership of Lee Hojin According to Will"

Former Taekwang Group Chairman Lee Hojin won the second trial in a lawsuit against his sister over their late father's 'nominee inheritance.'

[Image source=Yonhap News]

According to the legal community on the 17th, the Seoul High Court Civil Division 6-3 (Presiding Judges Lee Kyunghun, Kim Jewook, and Kang Kyungpyo) ruled that Lee, the former chairman, must be paid KRW 15.35 billion and delayed interest by his sister Lee Jaehun in a damages claim lawsuit. The first trial had ruled that Jaehun must pay Lee KRW 40 billion and delayed interest.

The siblings' dispute originated from the will left by their late father, former chairman Lee Imyong, who passed away in 1996. The will stated that "property should be given only to the wife and sons, excluding the daughters, and if there is any remaining property, it should be handled according to the wishes of the executor of the will, former chairman Lee Gihwa (Lee Hojin's maternal uncle, deceased in 2019)." The "remaining property," which was unspecified at the time, was revealed during the 2010-2011 investigations by the prosecution into Taekwang Group and the National Tax Service's tax audit as stocks and bonds held under nominee names by the late chairman Lee.

In October 2010, the Taekwang Group's fund manager handed the nominee bonds to Jaehun and later requested their return in 2012, but Jaehun did not comply. Consequently, Lee filed a damages lawsuit in 2020. He claimed that he had solely inherited these bonds and had temporarily entrusted them to Jaehun through the fund manager, but Jaehun argued that the will was invalid.

The first trial court ruled that "the part of the will concerning the 'remaining property' violates the principle of personal exclusivity of wills (which prohibits transfer to others) and is therefore invalid." However, since Lee had effectively possessed the bonds from the time of the late chairman's death and the period during which other heirs could raise objections had passed, the court determined that Lee was the rightful owner of the bonds.

The court also acknowledged Lee's claim that the bonds entrusted to Jaehun amounted to KRW 40 billion.

The second trial also ruled that the bonds belonged to Lee but based its judgment on different grounds from the first trial. It held that the late chairman's will regarding the "remaining property" was valid and that Lee lawfully inherited the bonds according to the wishes of former chairman Lee Gihwa. The court stated, "The will includes a provision transferring group management rights to Lee, and for this, he must necessarily possess the nominee property." It viewed that the will's intent was for former chairman Lee Gihwa to transfer the nominee property to Lee. However, the court recognized only KRW 15.35 billion of the bonds held by Jaehun, which was clearly proven through financial transaction records, and ruled that the amount to be returned to Lee was limited to this sum.