이 기사는 2021년 09월 14일 07:55 thebell 에 표출된 기사입니다.

The second trial tied to a dispute between Shin Chang-jae, the chairman of Kyobo Life Insurance, and its financial investors was held last Friday, with the debate focused on whether emails exchanged between the investor group and its accounting firm, Deloitte Anjin, can be seen as evidence for an alleged conspiracy to inflate the price of Kyobo shares subject to put options.

Park Jin-ho, the vice president of the South Korean insurance company, appeared in the court on that day as a witness called by the prosecution.

Park was responsible for providing the company’s financial information required to be publicly disclosed under the capital market law when Kyobo reported Deloitte Anjin to the prosecutors in 2020.

“We found violations by Deloitte Anjin during the process of preparing for regulatory filings,” Park said in his testimony. “We decided to report the accounting firm to the prosecutors after receiving legal advice because not doing so would cause legal issues for our executives in charge of information disclosure.”

After months of investigation, the prosecution earlier this year indicted individuals from Deloitte Anjin and officials from the investor consortium – which consists of Affinity Equity Partners, IMM Private Equity, Baring Private Equity Asia and Singapore’s GIC – for allegedly mispricing Kyobo shares subject to the put options included in the shareholder agreement between Shin and the investors.

Park argued that Deloitte Anjin did not carry out a valuation of the shares in an objective and fair manner, but just performed calculations according to the investor group’s directions. To support his testimony, Park provided emails exchanged between the investor group and the accounting firm.

In an email to Deloitte Anjin, IMM Private Equity asked the accounting firm to estimate the price of Kyobo shares based on various valuation approaches and to compare the estimated prices when the price-to-earnings and price-to-book ratios are used as metrics for valuation. IMM Private Equity said in the email that the decision would be made after reviewing the estimates internally.

Deloitte Anjin also provided the investor group with stock price estimates calculated based on a different mix of comparable companies. The accounting firm said in an email to IMM Private Equity that it would make a report after receiving confirmation from the receiver of the email.

The investors exercised the put options in 2018 to sell their stakes back to Shin at 409,000 won ($347.85) per share, which was the highest price of all estimates. Based on the emails between the investor group and the accounting firm, the prosecution contended that the investor group made the final call on the stock price, suggesting that the objectivity of the valuation process was impaired.

Questioning for Park by the defense was supposed to take place on the same day but has been postponed. The third trial will be held on October 1. (Reporting by Eun-sol Lee)