Korean court sides with Deloitte Anjin over put option battle with Kyobo Life

[Image source: Kyobo Life Insurance]

Shin Chang-jae, chairman of South Korea’s Kyobo Life Insurance Co., may have to buy back shares from its financial investors at a higher cost after a Seoul court sided with Deloitte Anjin LLC that was in charge of the valuation for the put option in a second trial on Friday.

The Seoul High Court upheld the lower court’s ruling that found two Deloitte Anjin executives charged without detention not guilty of violating the certified accountant act. Another Deloitte Anjin employee and two Affinity Equity Partners employees were also acquitted. They are accused of appraising the value of Kyobo Life Insurance in favor of financial investors upon exercising put option rights in October 2018.

“There is no evidence that the put option price was set without any involvement of accounting experts from Deloitte Anjin,” the court said. “The issue was whether there was a review by professional accountants for price setting.”

Kybo Life Insurance expressed disappointment over the ruling, saying that the acquittal comes despite “multiple evidences and conspiracy circumstances.”

Kyobo Life Insurance noted that the ruling does not justify the put option price claimed by Affinity Equity Partners and Deloitte Anjin.

It cited the International Chamber of Commerce (ICC’s) ruling in September 2021, which cleared Chairman Shin of a responsibility to buy back a stake in Kyobo Life Insurance from financial investors at 410,000 won ($329) per share. Affinity Equity Partners appealed to the international arbitrators and is awaiting for a final ruling.

The long years of battle comes after a consortium of financial investors led by Affinity Equity Partners exercised their put option rights in 2018 and demanded Kyobo Life Insurance to buy back their stake at 410,000 won per share. The consortium bought the shares in 2012 from POSCO International and Korea Asset Management Corp. for 245,000 won per share.