INFINITT Healthcare: "First-Instance Ruling on Electronic Proxy Not Finalized Yet… Will Actively Explain in Appeal"

INFINITT Healthcare (071200) stated its position regarding the recently reported first-instance ruling on electronic proxy statements, clarifying that the case has not yet been finalized and that it is inappropriate to generalize that the company’s response was illegal. The company emphasized that it has already filed an appeal and intends to fully explain the legitimacy of its actions during the appellate proceedings.

On August 3, INFINITT Healthcare issued a statement pointing out that while a media outlet reported—citing materials from a shareholder activism platform—that the court recognized the validity of electronic proxy statements and definitively judged the company's response as unlawful, this is not a final ruling.

According to the company, the case remains at the first-instance decision stage, and they have already filed an appeal because they fundamentally disagree with both the content of the ruling and its legal interpretations. The fact that they have filed an appeal has also been disclosed through the Korea Exchange electronic disclosure system.

INFINITT Healthcare stated, "This is an unresolved case currently awaiting an appellate decision, so it is prudent not to interpret the company’s actions as definitively illegal or to generalize that the same legal principles apply to all electronic proxy statements based solely on some first-instance findings."

The company also highlighted that in other cases involving the same shareholder meeting and electronic proxy statements, the courts repeatedly acknowledged that the company's judgments were based on reasonable grounds.

According to the company, courts such as the Seoul High Court have determined that, for an electronic proxy statement to be recognized as valid at a shareholders’ meeting, it must be submitted in a manner—like a paper proxy statement—that enables verification of its originality, identity, integrity, and whether it has been tampered with or counterfeited.

In those cases, the documents submitted to the company were printouts of the electronic proxy statement and the document history certification, rather than documents allowing direct access to the original electronic proxy statement. The court concluded that such printouts alone made it difficult to readily verify the integrity of the electronic document and whether it had been altered or tampered with onsite.

The company also explained that the accompanying legal opinion and service guide materials were deemed insufficient as direct evidence of the originality and integrity of the individual electronic proxy statements.

Accordingly, the relevant courts determined that the company’s refusal to recognize the legal effect of the printouts submitted at the time could not be definitively considered illegal nor markedly unreasonable. As a result, both the application for permission to convene an extraordinary shareholders' meeting and the injunction to prohibit holding a shareholders’ meeting, which were filed at that time, were rejected.

INFINITT Healthcare explained, "The key issue at the time was not whether to recognize the electronic proxy statement system itself, but whether the submitted documents objectively enabled verification of the intention and authority of the proxy, as well as of the originality, identity, integrity, and potential tampering of the document."

The company added, "We did not deny the electronic proxy system, but rather sought to ensure the legitimacy and security of the shareholders' meeting resolutions by verifying whether the submitted materials at the time adequately demonstrated the proxy authority. The courts also repeatedly acknowledged that our decisions were based on reasonable grounds."

The company argued that the Seoul High Court’s rulings regarding repeated requests to convene extraordinary shareholders' meetings should also be taken into consideration.

According to the company, the Seoul High Court determined that, since a shareholders' meeting on the same agenda had already been held and the related dispute continued, permitting another extraordinary meeting on the same matters would likely only result in further legal disputes, potentially constituting an abuse of rights.

INFINITT Healthcare stated, "Recent reporting has highlighted only the unfavorable first-instance ruling for the company, whereas the court’s position that repeated exercises of shareholder rights may constitute an abuse of rights has not been mentioned. Since judgments on individual cases may differ depending on the specific facts—such as the submitted documents, details of the claims, timing of submission, and consultation process—it is inappropriate to conclude that the entire company response is illegal based on a single unresolved ruling."

The company reiterated that it cannot accept the first-instance decision, and that in the appellate proceeding it will provide a detailed explanation of the form and verifiability of the submitted documents, the process for submitting electronic proxy statements, the substance of the relevant judicial decisions, as well as the company’s responsibilities regarding verification at shareholders’ meetings.

A company representative stated, "While respecting shareholders’ legitimate voting rights, the company is also responsible for ensuring that the delegated authority exercised at shareholders' meetings is lawfully granted and for verifying the originality and integrity of the submitted proxy statement. As such, this case does not represent a final ruling on the overall validity of the electronic proxy statement system, nor does it constitute a conclusive finding of illegal conduct by the company. Thus, any broad interpretation should be approached with caution until the appellate decision is delivered."

This content was produced with the assistance of AI translation services.