What to many will come as unsurprising is news today from FLV Fund that the Seoul District Court has dismissed the claim from its Korean arm against local bank Hanvit. As PEO has reported over many months, FLV has been struggling to draw a line under a disastrous investment initiative it made in Korea that saw personnel representing FLV allegedly collude with Hanvit to deprive the Fund of a $30m investment sum.
FLV today said that the two representatives of its Korean arm, John Seo and Pol Hauspie visited Hanvit Bank's main office in early June 2000 to organize the investment. At this meeting they suggested extending a loan in John Seo's name and to establish a pledge over a deposit made by partner firm Lernout & Hauspie [L&H] and L&H Korea shares. It was allegedly then agreed that these should subsequently be replaced by FLV Korea's funds.
IN its statement the Fund said; 'FLV Fund is convinced that the Court's findings are inaccurate on a number of fundamental issues, and wrongly assumes that Pol Hauspie and John Seo could validly represent or act on behalf of FLV Fund Korea or FLV Fund.' FLV has been arguing such a pledge would require the consent of a special resolution at a shareholders meeting and that this never occurred.
The Seoul District Court has apparently ruled that, in its opinion, if the shares of a corporation are owned by one single shareholder, that single shareholder's consent constitutes an effective substitute for a special resolution at a shareholders meeting, even if there is no such separate special resolution. The Court has taken the view that Seo and Hauspie reprsented the single shareholder.
FLV Fund Korea is now appealing against this decision and has prepared further legal action 'against the individuals responsible for illegally pledging all of its assets to Hanvit Bank'.
FLV has already written off the $30m in its 2000 accounts but will still be liable for all costs incurred in pursuing this claim if it is not unsuccessful.