Court Orders Korea Communications Commission to Revoke Approval of YTN Largest Shareholder Change

Court: "Korea Communications Commission's Two-Member Decision-Making Process Was Procedurally Flawed and Therefore Illegal"

The court has ruled that the Korea Communications Commission's approval of the change in YTN's largest shareholder must be revoked.

On November 28, the Seoul Administrative Court's Division 3 for Administrative Affairs (Presiding Judge Choi Sujin) ruled in favor of the plaintiff in a lawsuit filed by the YTN Employee Stock Ownership Association against the Korea Communications Commission, seeking to cancel the approval of the change in the largest shareholder. The lawsuit filed by the YTN labor union was dismissed on the grounds of lack of standing.

The court stated, "The defendant (the Korea Communications Commission) made the decision and granted approval with only two members present, so the procedure for this approval was flawed and therefore illegal."

The court further explained, "The defendant is a collegial administrative body, and its decision-making process requires mutual discussion, persuasion, and deliberation. If only two members are present, even if an exchange of differing opinions is possible, a single dissenting vote would prevent a decision from being made, making it practically impossible for the principle of majority rule to function."

The court also noted, "It is desirable for the defendant's major decisions to be made with all five members appointed and present, with approval from at least three members. Even if, due to unavoidable circumstances, fewer than five members are present, the defendant must have at least three members present for the body to function effectively as a collegial institution and for decisions to be valid."

Previously, Eugene ENT, a special purpose company established by Eugene Corporation and Dongyang, acquired a 30.95% stake in YTN held by KEPCO KDN and Korea Racing Authority.

On February 7 last year, the Korea Communications Commission approved Eugene ENT's application for a change in the largest shareholder. In response, the YTN branch of the National Union of Media Workers and the Employee Stock Ownership Association filed a main lawsuit and a request for injunction, challenging the validity of the Korea Communications Commission's decision made with only two members. Their requests for injunction were previously dismissed or rejected.