Busan Legal Consultation Recommendation | Busan Legal Consultation Client Succeeds in an Application to Inspect Accounting Books

Through the Busan legal consultation, the Daeryun Busan attorney argued the suspicions of embezzlement and other misconduct by the debtor.

The client is a shareholder holding about 7% of the debtor's issued shares, and is a party with a right to the smooth and sound operation of the company.

Through the Busan legal consultation, the client argued that, even though the debtor's operating profit margin had declined over the past 10 years, entertainment expenses, salaries, office rent, and vehicle lease payments had increased.

Although the client had requested materials related to the company's performance from the debtor, the debtor was unable to give a clear answer.

In addition, through the Busan legal consultation, it was argued that the debtor had never once gone through the procedures for approving the financial statements and other agenda items at a regular general meeting of shareholders, and had never once provided the financial statements to the creditors, who were shareholders.

Commercial Act

Article 366 (Request for Convocation by Minority Shareholders)

① A shareholder holding 3/100 or more of the total number of issued shares may request the convocation of an extraordinary general meeting by submitting to the board of directors a document or electronic document stating the purpose of the meeting and the reasons for convocation.

② Where the procedures for convening the general meeting are not taken without delay after the request under paragraph ①, the shareholder who made the request may convene the general meeting with the permission of the court. In such case, the chairperson of the general meeting of shareholders may be appointed by the court upon the request of an interested party or ex officio.

③ The general meeting under paragraphs (1) and ② may appoint an inspector to investigate the business affairs and the state of property of the company.

Article 466 (Shareholders' Right to Inspect Accounting Books)

(1) A shareholder holding 3/100 or more of the total number of issued shares may, by a document stating the reasons, request inspection or copying of the accounting books and documents.

(2) The company may not refuse such request unless it proves that the shareholder's request under paragraph (1) is unjustified.

Seoul District Court, Judgment of April 1, 1998, 97Gahap68790

A shareholder's request for inspection and copying is recognized where there has arisen a specific ground to suspect that the company committed a wrongful act in conducting its business, where a serious fact has arisen in which the company's conduct of business violated statutes or the articles of incorporation, where there are specific grounds that could worsen the company's management condition, or where there are specific grounds to find that the shareholder has a need to ascertain the company's management condition or to supervise and correct it.

Because a lawsuit for granting the application to inspect and copy accounting books requires complex legal procedures and specialized accounting knowledge, a legal consultation with a specialized attorney is necessary.

If you need a 🔗legal consultation with a specialized attorney in a situation such as the one above, please reach out to the 🔗Busan office of the Daeryun law firm.