*This content was translated by AI.
The Economic Reform Alliance and minority shareholders of Yeongpo recently filed an appeal against the first-instance ruling in the Joo Ju (CEO) lawsuit they filed against current and former directors, including Yeongpo advisor Jang Hyung-jin, regarding the Yeongpo Smelter's violation of environmental laws, including cadmium leakage into the Nakdong River.
The Economic Reform Alliance stated, "The seriousness lies in the fact that Yeongpo Smelter repeatedly violated environmental laws over a long period," and added, "We will do our utmost to return damages equivalent to the administrative penalty to the company."
The Economic Reform Alliance filed the lawsuit last November, citing the fact that Yeongpo was fined approximately 280 billion won by the Ministry of Environment. At that time, the plaintiffs argued that Advisor Jang and Yeongpo's executives violated their duties as directors, causing damage to the company.
The first-instance court ruled that it was difficult to conclude that two of Yeongpo's Jeon (CEO) directors ordered or condoned the leakage of hazardous substances, and also found it hard to acknowledge that they ignored the establishment of an appropriate internal control system. Regarding Advisor Jang, the court noted that he was not listed as a director at the time of the incident and that it was difficult to confirm specific work instructions or execution related to the operation of the Smelter or the cadmium leakage, thus not recognizing his responsibility as an executive director under the Commercial Act.
In response, the plaintiffs argued that the court applied the strict evidentiary standards of criminal trials directly to the civil damages lawsuit. They particularly criticized the court for not accepting multiple requests by the plaintiffs to review criminal records during the lawsuit process.
In fact, in an administrative lawsuit conducted separately from the criminal proceedings, the legality of the penalty decision had already been recognized. The Seoul Administrative Court ruled against the plaintiffs in February last year in a lawsuit filed by Yeongpo to cancel the penalty decision imposed by the Ministry of Environment. At that time, the court found that cadmium had leaked from the Smelter into the Nakdong River from April 2019 to April 2021, and deemed the penalty decision of approximately 280 billion won to be legal. The case is currently undergoing appeal proceedings.
Furthermore, the plaintiffs pointed out that the leakage of hazardous substances from the Smelter has occurred habitually up to recently, and repeated suspensions of operations have caused significant damage to shareholders and the local community. The gist is that merely investing in facility upgrades does not constitute fulfillment of the directors' duty of supervision and oversight.
The Economic Reform Alliance stated, "The strict evidentiary standards of criminal trials were applied directly to the civil damages lawsuit," and "It cannot be said that the directors fulfilled their duty of supervision and oversight merely through facility improvement investments." They added, "Given the repeated occurrence of hazardous substance leakage, internal control and supervisory responsibilities must be strictly held accountable," and expressed their intention to do their utmost to challenge the issues with the first-instance ruling in the appeal court.
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*This content was translated by AI.
