Supreme Court: SK Securities Violated Duty to Disclose in Mayu Cream Fund; Damages Must Be Recalculated
Creatrip Team
4 months ago
South Korea’s Supreme Court ruled that SK Securities and Waterbridge Partners breached their duty to provide key information when promoting a private equity fund that bought cosmetics maker BNB Korea, known for popular “mayu cream” (horse oil cream). The firms failed to notify limited partners (LPs) that the main buyer, Claress Korea, was planning its own factory and that geopolitical tensions (THAAD) could hurt sales—risks discussed internally but not shared with investors. Lower courts found the managers violated their duty of care, and the Supreme Court agreed they failed to reasonably investigate and disclose material facts. However, the high court sent the case back to recalculate damages: compensation should reflect unrecovered amounts (investment minus recovery), not the full 2 billion KRW investment, because asset recovery and company stock value require careful assessment during liquidation.
