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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Smilegate has lost a first-instance lawsuit related to liability over a delayed initial public offering (IPO), with the court ordering the company to pay significant damages.
On April 2, the Seoul Central District Court’s Civil Division 31 ruled in favor of Rhinos Asset Management in a damages suit filed against Smilegate. The court ordered Smilegate to pay KRW 100 billion (approximately $75 million), plus interest, to the plaintiff.
While the lawsuit was formally filed under the name of Mirae Asset Securities, Rhinos Asset Management is considered the substantive party to the case.
The dispute dates back to 2017, when Rhinos, through Mirae Asset Securities, purchased approximately KRW 20 billion worth of convertible bonds (CBs) issued by Smilegate RPG. At the time, the parties agreed to pursue an IPO if the company’s net income exceeded KRW 12 billion in the fiscal year immediately preceding the bond maturity.
However, Smilegate later claimed that its obligation to proceed with the IPO had lapsed and did not move forward with the listing. In response, Rhinos filed a lawsuit in 2023, seeking damages.
The court determined that Smilegate did, in fact, have an obligation to pursue the IPO and was liable for failing to fulfill that obligation. It fully accepted Rhinos’ claim for KRW 100 billion in damages.
In response, Smilegate stated that it plans to carefully review the court’s reasoning and file an appeal. “We will thoroughly examine the details of the ruling and its legal basis before proceeding with an appeal,” the company said, adding that it will respond cautiously in consideration of future legal procedures.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
