3 Deloitte Anjin Accountants and an Affinity Member Indicted
The International Chamber of Commerce holds an online arbitration hearing on March 15 to 19 with regard to the shareholder agreement between Kyobo Life Insurance chairman Shin Chang-jae and Affinity Equity Partners as a financial investor.
The hearing was supposed to be held in September last year. However, it was postponed to this month due to COVID-19. The arbitration procedure was initiated in March 2019 at the request of Affinity.
Its consortium including IMM PE, Baring PE and GIC Private Limited joined the chairman, as a white knight, when Daewoo International sold 24 percent of Kyobo Life Insurance shares back in 2012. Affinity signed the shareholder agreement including a put option with the chairman in September 2012.
Later, Affinity exercised the put option in October 2018 and submitted a per-share price of 409,912 won (2,012.2 billion won in total) in November, claiming that the chairman broke his promise to go public by September 2015 and made its investment exit difficult. The chairman claimed that the exercise of the put option was invalid and Affinity brought the case to the International Chamber of Commerce.
The chairman accused Deloitte Anjin accountants in April last year, saying, “They intentionally applied the valuation reference date to the advantage of Affinity in calculating the fair market value of the put option.” The prosecution recently indicted three accountants and an Affinity member for having violated the Certified Public Accountant Act by making a false report and so on. According to Kyobo Life Insurance, the indictment can have an effect on the determination of the International Chamber of Commerce.