Lawsuit for Invalidating the Issuance of ConvertibleDebentures by Samsung Electronics

Abstract

Equity-linked securities such as convertible bonds (CBs) and bonds with warrant (BWs) have been widely issued by Korean companies. On some occasions, CBs and BWs have been issued to those close to the controlling shareholder on unduly favorable terms. In recent years, investors have become less forgiving of such practices and have sometimes resorted to legal recourse. A public interest organization known as the Peoples Solidarity for Participatory Democracy is at the center of this new trend. The following

decision is the most recent, and perhaps the most controversial, of the lawsuits initiated by this NGO. Second, the decision has brought an end to the long-lasting political controversy surrounding the problem of judicial review, resulting in a profound political impact.