"Unfair gain from over-dividend"... Seongnam citizen filed an invalidation lawsuit

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Some Seongnam citizens have filed a lawsuit regarding the suspicion of preferential treatment for Daejang-dong development. Seongnam Ui Garden, a company created for the Daejang-dong business, filed a lawsuit saying it was invalid to allocate hundreds of billions of won to private operators.

Reporter Hong Young-jae reports.

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Nine people, including Seongnam citizen Park, submitted a complaint to the Seongnam Branch of the Suwon District Court on the 20th to confirm that the distribution of dividends to shareholders by Seongnam Ui Garden, a public-private business created for the Daejang-dong development project, was invalid.

Seongnam Garden has paid out 590 billion won to its shareholders over the past three years, of which 440 billion won was distributed to Hwacheon Daeyu and its subsidiary Cheonha Dongin, which have only 1% and 6% stakes.

This is equivalent to 68% of the total dividends to all shareholders of Seongnam Garden.

The citizens who filed the suit argued that it was an illegal dividend that provided an unfair advantage to certain businesses.

He also raised the possibility that the dividend distribution was pre-determined based on an illegal contract or did not pass the normal resolution of the general shareholders' meeting.

[Lee Ho-seon / Attorney for Litigation: The fact that we have decided to distribute all of our profits for each business year in advance is against the principle of fidelity to capital prohibited by the company law. If the compulsory regulations are violated, such decisions under the Company Act are invalid.]

The litigation team also announced that the Seongnam Urban Development Corporation, which had neglected to return the undue profits obtained by Hwacheon Daeyu by invalidating the Seongnam Courtyard dividend, would soon be prosecuted for breach of trust.

Previously, in August and December of last year, the indigenous people of Daejang-dong filed a lawsuit alleging that Seongnam Garden gave a lower compensation than the market price, and 9 other indigenous people of Daejang-dong filed a lawsuit claiming that the apartment sale price to be received after land expropriation was set too high. Sentencing is due on the 30th of this month.

(Video editing: Lee Seung-hee, CG: Seo Seung-hyun)