IMM PE urges Kyobo Life chairman to honor put option as ordered by Korean court, ICC

Kyobo Life Insurance Chairman and CEO Shin Chang-jae speaks during the company’s 2025 strategic kickoff meeting at the insurer's training center in Cheonan, South Chungcheong Province, Jan. 10. Courtesy of Kyobo Life Insurance

IMM Private Equity (IMM PE) is urging Kyobo Life Insurance Chairman and CEO Shin Chang-jae to fulfill his obligations to repurchase the insurer’s shares under a put option, citing the Korean court’s recent recognition of the International Chamber of Commerce's (ICC) arbitration ruling.

A put option lets investors sell assets such as company shares at a fixed price by a certain date if they choose to. In the context of the Kyobo Life dispute, financial investors including IMM PE secured a put option that gave them the right to sell their shares back to Shin if Kyobo Life failed to go public by an agreed deadline.

A yearslong legal dispute between IMM PE and Shin began in October 2018, when a consortium led by Hong Kong-based Affinity Equity Partners — and including IMM PE, EQT Partners and Singaporean sovereign wealth fund GIC — exercised its put option, demanding that the chairman repurchase their shares at 410,000 won ($280) per share after the insurer failed to go public.

“The ICC International Court of Arbitration clearly acknowledged that Shin is obligated under the shareholders’ agreement to appoint an appraiser and submit a valuation report (for the put option shares), and since the Korean court has approved this ruling, he must now submit the valuation report and ultimately carry out the put option,” an IMM PE official said.

The official added that, in light of these domestic and international rulings, the put option process is expected to proceed and be executed swiftly.

In December 2024, the ICC court ruled that if Shin fails to designate an appraiser and submit a valuation report for the put option shares within 30 days, as stipulated in the shareholders’ agreement with financial investors, a penalty payment may be imposed. The tribunal set the amount of this penalty at $200,000 per day.

This type of penalty is a daily monetary charge until compliance is achieved.

For an international arbitration award to be legally enforceable in Korea, it must be recognized by a domestic court.

Kyobo Life Insurance's headquarters / Courtesy of Kyobo Life Insurance

According to IMM PE, the Seoul Central District Court recently upheld most of the ICC’s ruling, affirming that Shin is obligated to appoint an appraiser and authorizing enforcement in Korea if he fails to comply.

However, the court did not approve the portion of the ICC’s ruling that imposed a penalty payment on Shin, ruling that the ICC tribunal had no authority to impose such penalties and therefore they must be ordered by a Korean court.

IMM PE appealed the decision.

“This ruling clearly contradicts precedent set by the Supreme Court,” the official said.

In 2012, the Affinity consortium signed a shareholders’ agreement with Shin after acquiring a 24 percent stake in Kyobo Life from the now-defunct Daewoo International for 1.2 trillion won, or 245,000 won per share.

The consortium’s 24 percent stake was split among Affinity with 9.05 percent, IMM PE and EQT each with 5.23 percent, and GIC with 4.5 percent.

The agreement stipulated that if Kyobo Life failed to go public by the end of September 2015, financial investors would be entitled to exercise a put option and sell their shares to Shin.

As Kyobo Life’s IPO fell through, the Affinity consortium exercised the put option in 2018 at a price of 410,000 won per share. However, Shin refused to honor the option, arguing that the price was excessively high and that a fair valuation was needed. This led the consortium to initiate international arbitration proceedings against him.

Among the consortium members, Affinity and GIC sold their stakes in Kyobo Life last month through negotiations with Shin, reportedly at around 234,000 won per share.

Nevertheless, IMM PE and EQT Partners are continuing their legal battle, standing firm in their intention to see the put option dispute through to the end.

Kyobo Life’s recent stock valuation is estimated at around 198,000 won, according to the insurer.