Financial investors (FI) who invested in Kyobo Life Insurance will file an arbitration application for damage compensation to Chairman Shin Chang-jae of the kyobo life insurance company within this month. It is because Chairman Shin failed to make an IPO (Initial Public Offering) within the promised time limit, and they lost money due to the failure to collect investment.
According to the Chosun Biz on Feb. 18, Kyobo Life Insurance FI, including SC Private Equity (PE) and IMM PE, have decided to apply for arbitration to the Korean Commercial Arbitration Board for damage compensation during this month. In late October last year, FI, including Affinity and IMM PE, informed Chairman Shin of their intention to exercise their put option for 24 percent of their shares.
Chairman Shin, who was not friendly to management intervention, postponed the IPO until recently, and finally announced the IPO in December last year. Kyobo Life Insurance has decided to push for listing in the second half of this year. However, due to the worsening profitability of the insurance industry and the application of new accounting standards, the FI believes that even IPOs do not pay back the investment.
The FI has been negotiating with Chairman Shin over the proper value of Kyobo Life Insurance. "We delivered a report to Chairman Shin on the valuation of the striking price of the put option to the company, but there was no response. As a result, we considered the arbitration request," said a representative for the FI.
Kyobo Life Insurance believes that FI have filed an arbitration claim with a "press card" to collect investment. If the court's arbitration ruling is in favor of the FI, the FI will have the right to seize and dispose of Shin's shares or property. The court`s judgment also suggests that a third party sale of Kyobo Life Insurance`s management rights could be discussed, the Chosun Biz reported.