Korean banks, builders suffer from soaring lawsuits; Samsung Group’s financial affiliates ― Samsung Life, Samsung Card and Samsung Fire & Marine ― are involved in over 2,000 lawsuits, more than any other financial institutes

June 23, 2013 Leave a comment

2013-06-20 18:56

Banks, builders suffer from soaring lawsuits

By Kim Tae-jong
Eighty percent of big firms surveyed are involved in legal disputes, recent data showed Tuesday.
According to the data compiled by business monitoring firm CEO Score, 182 firms that are under a “disclosure’ requirement by stock-related regulations are mired in 26,640 lawsuits.The number breaks down to 16,495 cases with the firms being claimants ― the amount of damages valued at 12.14 trillion won ― and 10,113 as defendants for 7.29 trillion won.
The total amount of damages or compensation being sought were estimated at 20.59 trillion won ($18 billion) as of the end of last year.
By firms, Woori Bank was involved in the most lawsuits at 1,305 whose value stood at 2.018 trillion won. The number of lawsuits filed by the bank and against it was 952 and 353, respectively.
POSCO was involved in 54 lawsuits whose value stood at 1.55 trillion won. POSCO has been in a civil suit filed by its Japanese rival Nippon Steel & Sumitomo Metal, which claim the Korean steel maker illegally obtained and used its manufacturing technology for specialized steels, demanding that POSCO pay about $1.3 billion in compensation, the largest litigation value for a single case involving a local firm.
Kookmin Bank was embroiled in 359 lawsuits whose litigation value stood at 1.16 trillion won. The Korea Exchange Bank and Shinhan Bank were also involved in 1,071 and 369 cases, respectively.
Many construction firms were also engaged in lawsuits ― Hanshin Engineering & Construction (E&C), SK E&C, Daewoo E&C and Hyundai E&C, whose litigation value was 664 billion won, 520 billion won, 506 billion won and 503 billion won, respectively.
Of state-run firms, the Korea Electric Power Corp. (KEPCO) was involved in the largest number of lawsuits whose litigation value stood at 538 billion won.
But Samsung Electronics, which has been involved in the billion-dollar lawsuits with Apple, did not report the state of legal disputes, as the company argued the lawsuits have little impact on management, CEO Score said.
The number of lawsuits filed by and against 15 insurers was 12,942, which accounted for about 50 percent of the total legal cases by researched 182 firms, although their litigation value stood only at 1.6 trillion won.
But the number of lawsuits filed by insurers exceeded that of those against them, at 8,344 and 4,598, with CEO Score arguing insurers filed lawsuits so as not to pay insurance benefits.
LIG was involved in the largest number of lawsuits of 5,090, followed by Samsung Life Insurance with 3,040.
Interestingly enough, Samsung Group’s financial affiliates ― Samsung Life Insurance, Samsung Card and Samsung Fire & Marine Insurance ― are involved in over 2,000 lawsuits, more than any other financial institutes.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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