Cho, Joseph; Young Shin, Eun --- "Piercing of the Corporate Veil in Korea: case commentary" [2012] ELECD 871; in Kim, Hwa-Jin (ed), "Korean Business Law" (Edward Elgar Publishing, 2012)

Book Title: Korean Business Law

Editor(s): Kim, Hwa-Jin

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781781003398

Section: Chapter 5

Section Title: Piercing of the Corporate Veil in Korea: case commentary

Author(s): Cho, Joseph; Young Shin, Eun

Number of pages: 22

Extract:

5. Piercing of the corporate veil in
Korea: case commentary1
Joseph Cho and Eun Young Shin

I. INTRODUCTION

Today's corporations set up subsidiaries for a variety of reasons includ-
ing optimal corporate governance and diversification of business. In the
context of a parent-subsidiary relationship, there may be situations where,
from a legal standpoint, each constituent company exists as a separate
entity, whereas, from an economic viewpoint, the subsidiary in effect
operates under uniform control of the parent. In situations involving such
a corporate group, treating the parent company and its subsidiary as dis-
tinct legal entities may result in an outcome that, depending on the facts
involved, defies the principle of justice and equity. The utility of piercing
the corporate veil2 has been debated in Korea in an ongoing bid to redress
such possible inequity. Arguably, while the concept of veil piercing3 is not
confined to the realm of parent company-subsidiaries, cases involving a
single economic unit would, in general, be more prone to veil piercing than
others. In fact, the doctrine of veil piercing is likely to foment more issues
and controversies in the parent-subsidiary context than any other.
In the case at hand,4 the plaintiff put forward the allegation that the
defendant's denial of liability behind the façade of a subsidiary controlled
by it amounted to an abuse of corporate personality in contravention of



1 This is an updated version of a piece that was originally published in Journal

of Korean ...