KT&G Wins Lawsuit Against Journalist Over Unfair Reporting

According to a report from South Korean news outlet Newsway, tobacco company KT&G has achieved a final victory in a lawsuit filed by a journalist and other media outlets regarding alleged unfair practices during the acquisition process of its subsidiary. The case has gone through two trials before this ultimate triumph.

Legal experts have revealed that on November 30th, the Supreme Court's First Civil Division upheld a decision to dismiss the appeal brought by KT&G against Kang Jin-gu, a former journalist of "Kyung-Hyang Shinmun," for damages.

The concept of non-acceptance of appeals refers to the system in which the Supreme Court dismisses appeals without reviewing the case.

Previously, on February 26, 2020, Kang published an article titled "KT&G Accused of Concealing New Drug Toxicity and Coercive Unfair Mergers" in "京乡新闻" magazine.

An article alleges that KT&G suppressed the toxicological test results of its subsidiary, KT&G Life Science Company, and manipulated the merger ratio by inflating the enterprise value during the merger with its subsidiary Yongjin Pharmaceutical in 2016.

The article also claims that KT&G Life Science Company has an illicit undisclosed agreement, whereby if the initial public offering of the merger case fails, compensation will be provided to investors of KT&G Life Science Company. Additionally, the CEO of the progressive pharmaceutical company opposing the merger was dismissed and replaced by someone from the headquarters of KT&G.

KT&G has filed a lawsuit seeking damages against Kang and others, alleging that their statements are false and have harmed the company's public perception.

In August 2022, the initial court recognized the public interest of the report but ruled that there was no reason to believe Jiang's claims of undisclosed agreements and concealed toxicity tests were true. The court also supported KT&G's view, stating that the report not only failed to raise any doubts but also used conclusory language to defame KT&G, and the opposing views were not adequately countered.

In the second trial held in July of this year, the court stated that the content in the article written by former journalist Mr. Kang, including claims of "reaching agreements with investors," "unfair dismissal of management executives," and "concealing genetic toxicity," were found to be false. The initial ruling was deemed justified, and therefore, the defendant's appeal was dismissed on grounds of lack of merit.

On November 30th, the Supreme Court unreasonably rejected the case, bringing an end to the 3-year, 10-month long litigation with KT&G emerging as the ultimate victor.