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Headquarters of Samsung Electronics, a giant based in Korea.
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Ruling comes after fracas at shareholders’ meeting
The People’s Solidarity for Participatory Democracy (PSPD), a civic watchdog, has won a lawsuit against Samsung Electronics Co. that claimed the rights group’s officials were excessively limited in their ability to ask questions to the company at Samsung’s general meeting of stockholders in 2004. The court’s ruling ordered Samsung and Yoon Jong-yong, vice chairman of the company, to pay 13.5 million won (US$14,060) to the plaintiffs. Officials of PSPD’s economic reform center, who were entrusted with the voting rights of several minor shareholders, took part in Samsung Electronics’ general shareholders’ meeting in February 2004. At the meeting, one of the PSPD officials said, "Lee Kun-hee, chairman of Samsung Group, Lee Hak-soo, vice chairman of Samsung and Kim In-ju, director of the corporate restructuring office, provided politicians illegal funds, sinking the honor of the company and dropping the stock price. It is clear how the corporate restructuring office gave illegal funds to the Grand National Party (GNP) through Lee Hak-su. Is Samsung seeking a measure to punish them?"In response to these questions, Samsung vice chairman Yoon, who was chairing the meeting, tried to pull the PSPD officials and minor stockholders out of the meeting physically. In the process, the clothes of some participants were torn and a PSPD official fell to the ground and was injured. The Seoul Central District Court said in its ruling yesterday yesterday, "Commercial law has no specific regulations [on this issue], but the ability to ask questions should be considered an intrinsic right of stockholders. The function of a general meeting of shareholders is to obtain information about the company, to regulate its management, and to protect the rights of minor shareholders." The court added, "According to data provided by the Fair Trade Commission [FTC] on April 1, 2004, it is confirmed that the families of heads of conglomerates in the nation exercise 40 percent of managerial rights with just 3.4 percent stake in the companies. Under such corporate governance, the need is raised for social control aimed at the despotism of the largest stockholders of conglomerates. In this sense, to guarantee the rights of minor shareholders is truly necessary." According to the court, Samsung officials committed acts of violence when the PSPD officials were dragged out of the meeting. It also held in contempt vice chairman Yoon, who publicly called lawyer Song Ho-chang "mad." Song is deputy director of PSPD’s economic reform center.
