Recent Developments

Lee & Ko successfully secured a full acquittal for Kakao Corp. and related entities in a criminal prosecution alleging violations of the Financial Investment Services and Capital Markets Act (the “Capital Markets Act”) in connection with the SM market manipulation case.

The prosecution arose from events in February 2023, when HYBE announced a tender offer for shares of SM Entertainment Co., Ltd. (“SM”). Prosecutors alleged that Kakao Corp. and Kakao Entertainment Corp., in concert with One Asia Partners, engaged in on-exchange purchases of SM shares during the tender offer period, and that such conduct constituted market manipulation under Article 176(3) of the Capital Markets Act, specifically, a “series of transactions conducted for the purpose of fixing or stabilizing market prices.”

This case was unprecedented in that on-exchange share purchases during an ongoing tender offer period were prosecuted as market manipulation. A conviction could have created a substantial risk that similar on-exchange purchases during tender offer periods would be subject to criminal liability in the future. Accordingly, the case attracted significant attention not only within the capital markets industry, but also across the broader business and financial communities.

Lee & Ko represented Kakao Corp. and its related entities from the early stages of the investigation and throughout the trial, and effectively challenged the prosecution’s theory. The court accepted Lee & Ko’s arguments and expressly held that the on-exchange purchases were not undertaken for the purpose of fixing or stabilizing market prices, but rather constituted legitimate business decisions made to secure an equity interest.

This acquittal represents a significant judicial determination regarding the scope of permissible corporate actions in the context of corporate control disputes. In particular, the ruling is expected to serve as an important precedent in clarifying whether on-exchange purchases during a tender offer period may give rise to criminal liability. The judgment is also notable as a clear affirmation by a criminal court of the legitimacy of corporate managerial decision-making in such circumstances.

Lee & Ko’s Litigation Practice provides strategic representation in a wide range of corporate control disputes. In September 2025, Lee & Ko represented the Vice Chairman (the son of the Group Chairman) in key injunction and related proceedings arising from a corporate control dispute within the Kolmar Group, which is engaged in cosmetics manufacturing and related businesses. Lee & Ko obtained favorable outcomes in major interim relief proceedings, including injunction applications seeking to prohibit alleged unlawful conduct.

The dispute arose after the Chairman commenced an action seeking rescission of a share gift agreement under which he had previously transferred shares of Kolmar Holdings Co., Ltd., the group’s holding company, to the Vice Chairman, alleging breach of a family agreement, and seeking the return of the gifted shares. Related applications were also filed for (i) an injunction prohibiting the disposition of the shares, (ii) an injunction restraining the exercise of voting rights and related acts, and (iii) court approval to convene an extraordinary general meeting of shareholders.

Lee & Ko first secured favorable rulings in various injunction and related applications concerning the extraordinary general meeting of shareholders of Kolmar BNH Co., Ltd., enabling the meeting to proceed as scheduled. As a result, the Vice Chairman’s side obtained a majority on the board of directors of Kolmar BNH Co., Ltd.

Lee & Ko also challenged the injunction prohibiting disposition of the shares that are the subject of the main return-of-shares action, and obtained a revised court order requiring an additional cash security deposit of KRW 5 billion, in addition to the previously required surety bond.

As a result, the related interim disputes have largely been resolved in practice, and the main action for return of shares between the Chairman and the Vice Chairman remains pending.

Lee & Ko successfully defended Company A, a major corporate group affiliate, in a case involving the death of a subcontractor’s worker at a coal unloading facility. On March 6, 2025, the court rendered a not guilty verdict for all defendants – Company A, its CEO, and the plant manager – who had been indicted for violations of the Serious Accidents Punishment Act and the Occupational Safety and Health Act.

This marks the first acquittal in a Serious Accidents Punishment Act case involving a major corporate group.

On December 20, 2022, at the coal unloading facility operated by Company A, a dump truck loaded with coal overturned while unloading. The truck, which belonged to a transportation subcontractor, was raised without opening the rear gate of the bed, causing it to tip over. As a result, a worker from another subcontractor who was present at the scene was crushed by the coal and the vehicle and tragically lost his life.

The court held that there was no causal relationship between the fatal accident and any breach of the duty to protect workers from falling object hazards or the alleged failure to establish a safety and health management system under the Serious Accidents Punishment Act. The judgment clarified that the Serious Accidents Punishment Act does not intend to impose strict liability on business owners or management-level personnel. It emphasized that, where the accident clearly resulted from the operational error of the dump truck driver, it would be unjust to impose excessive criminal liability on the Company’s CEO or management.

In the absence of established case law regarding causation under the Serious Accidents Punishment Act at the time, Lee & Ko conducted a thorough analysis of the cause of the accident and objectively demonstrated how the incident occurred. By persuasively arguing that a causal link between a breach of occupational safety and health obligations and the resulting accident is essential, Lee & Ko secured a not guilty verdict.

This decision is expected to serve as a key precedent for determining causation in ongoing and future cases involving workplace fatalities under the Serious Accidents Punishment Act.
 

Lee & Ko represented Yonsei University in a case concerning the 2025 Yonsei University natural sciences entrance exam (early admissions) conducted on 12 October 2024 and ultimately won the case for the client against 18 students (the movants) who filed the action, including an application for a preliminary injunction demanding a retest.   

In the first instance, the court dismissed the application for a preliminary injunction demanding a retest, but granted a preliminary injunction stating that “the subsequent procedures following the entrance exam shall be suspended until the first instance decision on the merits has been rendered.”

This decision which accepted the preliminary injunction in part, caused Yonsei University’s early admissions process to be suspended, and caused much uncertainty not only for the students who took Yonsei University’s entrance exam in question, but all students across the nation facing university admissions, leading to much disruption in the national university admissions process. 

Lee & Ko immediately appealed against the first instance decision and argued that “① the movants do not have the right to suspend the admissions process for other selection units they have not applied for, ② the movants have no legal grounds to demand a retest and the suspension of subsequent procedures without a retest provides no benefits to the movants, so that there is no interest in protecting their rights and the necessity for preservation cannot be recognized, and ③ in the case of a ‘preliminary injunction to determine temporary status,’ a high degree of prima facie establishment regarding the right to be preserved and the necessity for preservation is required. However, in the present case, the movants mainly submitted evidence that was written anonymously, which undermines its credibility. Even when considering other evidence, there is insufficient prima facie establishment to conclude that the fairness of the essay test has been significantly compromised to the extent that it could invalidate the entire test.”

The appellate court sided with Lee & Ko, overturned the preliminary injunction granted by the court of first instance, and dismissed the movants’ preliminary injunction application. 

This case highlights how Lee & Ko successfully prevented significant disruptions to the 2025 admission process of not only Yonsei University but universities across the country. Lee & Ko’s success stemmed from our meticulous analysis of legal principles and development of logical arguments on various complex issues, including the scope of a preliminary injunction in civil cases, the prima facie level of proof needed to preserve rights in a preliminary injunction case and whether such preservation is necessary, and the scope of autonomy that private universities have in the admission process. 

Lee & Ko represented Samsung Electronics in an appeal regarding the case in which the company’s executives and employees were indicted and found guilty in the court of first instance of occupational negligence resulting in injury or death. The case arose from an accident at Samsung Electronics’ Giheung facility, where a carbon dioxide leak during the replacement of fire-fighting equipment resulted in three casualties. Through meticulous legal analysis and a thorough examination of the evidence, Lee & Ko developed the optimal defense strategy and ultimately secured an acquittal for Samsung Electronics’ executives and employees. Lee & Ko is currently representing the client in the appeal before the Supreme Court. 

The accident occurred when an improperly cut active wire triggered the carbon dioxide fire extinguishing system to operate, causing the connected selector valve to detach because it failed to withstand the pressure of the carbon dioxide, ultimately resulting in carbon dioxide leaking to the outside. 

In the first instance, the court determined that the accident was caused by the construction company’s negligence in improperly cutting an active wire, as well as Samsung Electronics’ executives and employees who failed to adequately manage the selector valve that emits carbon dioxide. The court thus found Samsung Electronics’ executives and employees guilty of occupational negligence resulting in injury or death.

Samsung Electronics retained Lee & Ko as its new counsel for the appeal. Lee & Ko emphasized that the detachment of the selector valve was a manufacturing defect, and that there was no legal or factual basis for imposing an obligation on Samsung Electronics, which simply purchased and used the selector valve, to inspect its pressure resistance. At the same time, Lee & Ko meticulously analyzed and contended that the first instance decision erroneously conflated civil law principles of product liability with criminal legal principles of occupational negligence. The appellate court sided with Lee & Ko’s arguments, acquitting Samsung Electronics’ executives and employees and overturning the first instance decision. This case exemplifies Lee & Ko’s strong advocacy skills to present the most effective case strategy and solution for clients. 

On behalf of KB Securities, Lee & Ko secured a complete victory against NH investment Securities in both the first instance and appellate courts for the return of the acquisition payment for a private derivative-linked security (DLS) worth KRW 30 billion. 

In 2018, KB Securities acquired DLS linked to underlying preferred shares issued by a corporate fund managed by a Singapore-based asset management company, from NH Investment Securities for approximately KRW 33 billion. It then sold the DLS to general investors who entered into specified money trust agreements with KB Securities.

At the time of the DLS sale, NH Investment Securities stated that the asset management company of the underlying asset issuance fund would invest the acquisition payment for the DLS in a Brazilian hotel construction project. The company also stated that purchasing an insurance policy with Chinese Sunshine Insurance shall be a term of issuance for the underlying assets to guarantee the recovery of the investment principal and interest. However, the asset management company purchased insurance policy from a different provider, and the insurance payment was not made when the hotel construction project eventually failed. 

In 2021, representing KB Securities, Lee & Ko filed a lawsuit against NH Investment Securities for breaching the terms of issuance of the DLS related to the underlying assets, seeking a full refund of the investment. Both the first instance and appellate courts upheld Lee & Ko’s argument that the terms were breached when an insurance policy different from the one specified in the DLS issuance agreement was purchased, thereby necessitating the return of the DLS acquisition payment. 

Lee & Ko’s victory is particularly noteworthy, as it is extremely rare for an investor to win a lawsuit in its entirety in cases involving financial investment products among institutional investors. Yet, through an accurate understanding of the transaction structure of the DLS product and an acute analysis of the underlying assets’ significance in the DLS issuance agreement, Lee & Ko secured complete victories in both levels of the court. We are currently representing the client in the appeal before the Supreme Court. 

This decision is expected to significantly contribute to clarifying the scope of liability for companies that issue DLSs and deterring the distribution of high-risk financial investment products that deviate from investment disclosures, preventing the creation of innocent victims. 

In May 2024Lee & Ko successfully represented the Ministry of Education(“MOE”) and the Ministry of Health and Welfare(“MOHW”), in the injunction case filed by professors and students of medical schools.

Faced with shortage of doctors, MOE and MOHW announced a policy to increase the annual enrolment quota for nationwide medical schools from 3,000 to 5,000 starting in 2025. In response to the government's policy, the medical students refused to attend classes and the doctors left the hospitals. In March 2024, Medical school professors and students applied for an injunction to prevent the government from enforcing the policy, arguing that the excessive increase in enrolment quota would seriously impede medical education. 

The trial court dismissed the case finding that the plaintiffs lacked standing to apply for the injunction in March 2024. However, the appellate court ordered the MOE and MOHW to submit evidence supporting the increase of the enrolment quota by 2,000. Given the significance of the matter, the MOE and MOHW retained Lee & Ko. Lee & Ko argued that the court should refuse to grant the injunction as the government sufficiently consulted with the medical community and the policy was essential for public welfare. In May 2024, after a thorough review of the records, the appellate court determined that the plaintiffs did have standing to file the lawsuit. However, the appellate court did not grant the injunction because granting the injunction would have a significant impact on public welfare.

The government's policy to increase the enrolment quota for medical schools was the most talked-about issue this year. As the decision acknowledges that the government's policy is essential for public welfare, it will assist the government in further pursuing its policy.
 

On behalf of Ilsan Grand Bridge Corp (“IGB”), Lee & Ko secured a winning award against Gyeonggi Province (the “Province”) in November 2022 in a lawsuit. The Appellate court also dismissed the appeal filed by the Province in May 2024.

IGB, a corporation established under the Act on Public-Private Partnerships (“PPP”) in Infrastructure (the “Act”) completed construction of Ilsan Bridge in 2008. The Province issued a business license granting IGB to manage the Ilsan Bridge for 30 years on the condition that IGB would transfer the title of the bridge to the Province after 30 years (According to IGB’s estimates, its expected profits from managing the Bridge until 2038 was USD 636 million). However, dissatisfaction among commuters grew as they needed to pay tolls to use the bridge. Around October 2021, the Province executed an administrative order to cancel IGB’s rights in the name of the public good and abolished the tolls.

Lee & Ko persuasively argued that even if the Province may cancel IGB’s business license under the Act, such administrative order must show that the public interest outweighs IGB’s right to a business license. Agreeing with Lee & Ko’s arguments, the court found that the administrative order lacked a clear public interest to revoke IGB’s rights and canceled the administrative order in November 2022. The Appellate Court affirmed the lower court’s decision in May 2024.

This case was the first case regarding the validity of an administrative order under the Act on which criteria the administrative order could be justified in the name of the public good, and thus will likely serve as an important precedent for the PPP projects.
 

Lee & Ko represented the defendants in a USD 227 million fund fraud case, which attracted much attention nationwide. Lee & Ko obtained a non-guilty verdict in the first and appellate court and is currently representing Discovery Asset Management Co., Ltd.(“DAM”), its executives and employees in the supreme court.

The prosecution indicted Discovery Asset Management Co., Ltd.(“DAM”), its executives and employees on the grounds that i) DAM managed the global fund of funds, which made an investment in U.S. P2P loans with high credit risk, but deceived investors by guaranteeing high returns; and ii) as Direct Lending Investments, which managed U.S. P2P loan products, went bankrupt, DAM failed to respond to all of the resell requirements, which came to a total of USD 227 million, leading to significant damages for the investors. 

On behalf of DAM, its executives and employees, Lee & Ko set up a T/F Team consisting of the attorneys from the litigation group, the criminal practice group, and the capital market compliance group, and argued that DAM was not able to acknowledge high credit risk of U.S. P2P loans by i) pointing out that under the Financial Investment Services and Capital Markets Act, a breach of the duty of care is legally distinct from intention in the context of a criminal offence; and ii) thoroughly analysing the management of U.S. P2P products, and the accounting principles in the U.S., among others. In December 2022, the court agreed with the arguments put forward by Lee & Ko and found DAM, all of its executives and employees not guilty. Likewise, in February 2024, the appellate court ruled that the lower court’s decision was justified.

How to distinguish the duty of care and intention in a criminal offence was the main issue in this case, and this court decision is expected to serve as an important precedent for similar cases in the future. Meanwhile, this case attracted a great deal of media attention, not merely due to the amount of damages, but because the representative director of DAM was a relative of a high ranking government official.