[Page 438]
IN THE MATTER OF AN ARBITRATION UNDER THE FREE TRADE
AGREEMENT BETWEEN THE REPUBLIC OF KOREA AND THE UNITED
STATES OF AMERICA AND THE UNCITRAL ARBITRATION RULES
PCA Case No. 2018-55
x-------------------------------------------------------x
In the Matter of Arbitration Between:
:
MASON CAPITAL L.P. and MASON MANAGEMENT LLC,
:
:
Claimants,
:
:
and
:
:
THE REPUBLIC OF KOREA,
:
:
Respondent.
:
x-------------------------------------------------------x
HEARING ON THE MERITS, Volume 3
Wednesday, March 23, 2022
New York International Arbitration Center
620 8th Avenue
16th Floor Conference Room
New York, New York
The hearing in the above-entitled matter came on
at 8:30 a.m. (EDT) before:
PROFESSOR DR. KLAUS SACHS, President of the Tribunal
THE RT. HON. DAME ELIZABETH GLOSTER, Co-Arbitrator
PROFESSOR PIERRE MAYER, Co-Arbitrator
[Page 439]
ALSO PRESENT:
Registry and Administrative Secretary to the
Tribunal:DR. LEVENT SABANOGULLARI
MS. JINYOUNG SEOKAssistant to the Tribunal:
MR. MARCUS WEILER
Realtime Stenographer:
MR. DAVID A. KASDAN
Registered Diplomate Reporter (RDR)
Certified Realtime Reporter (CRR)
Worldwide Reporting, LLP
529 14th Street, S.E.
Washington, D.C. 20003
United States of AmericaInterpreter:
MS. MYUNG RAN HA
[Page 440]
APPEARANCES:
On behalf of the Claimants:
MS. SOPHIE J. LAMB, QC
MR. SAMUEL PAPE
MR. BRYCE WILLIAMS
Latham & Watkins, LLP
99 Bishopsgate
London EC2M 3XF
United KingdomMS. LILIA VAZOVA
MS SARAH BURACK
MR. RODOLFO DONATELLI
MS. AMY CHAMBERS
Latham & Watkins, LLP
1271 Avenue of the Americas
New York, NY 10022MR. BEOMSU KIM
MR. YOUNG SUK PARK
MS. WOO JI KIM
MS. SU AH NOH
MS. YU JIN HER
KL Partners
7th Floor, Tower 8,
7 Jongro 5 gil, Jongro-gu,
Seoul
Republic of Korea 03157MR. ERIC DUNBAR
Evidence Presentation/Magna Legal ServicesParty Representatives:
MR. KENNETH GARSCHINA
MR. RICK ENGMAN
MR. MICHAEL CUTINI
[Page 441]
APPEARANCES: (Continued)
On behalf of the Respondent:
MR. CHANGWAN HAN
MS. YOUNG SHIN UM
MS. HEEJO MOON
MR. DONGGEON LEE
Ministry of JusticeMR. JEONG MYUNG PARK
Ministry of Health and Welfare
Government of the Republic of KoreaMR. PAUL FRIEDLAND
MR. DAMIEN NYER
MR. SVEN VOLKMER
MR. SURYA GOPALAN
MS. JOY LEE
MR. ERIC LENIER IVES
White & Case, LLP
1221 Avenue of the Americas
New York, New York 10020-1095
United States of AmericaMR. MOON SUNG LEE
MR. SANGHOON HAN
MR. HANEARL WOO
MR. JUNWEON LEE
MR. MINJAE YOO
MS. SUEJIN AHN
MS. YOO LIM OH
Lee & Ko
Hanjin Building
63 Namdaemun-ro Jung-gu
Seoul 04532
Republic of Korea
[Page 442]
C O N T E N T S
PAGE
PRELIMINARY MATTERS...........................................443
WITNESS:
[Redacted]
PROCEDURAL DISCUSSION......................................539
[Page 443]
PRESIDENT SACHS: Good morning, ladies and
gentlemen.
Are there any housekeeping matters that we
should discuss before hearing Mr. [Redacted]?
MS. VAZOVA: I don't believe so.
ARBITRATOR GLOSTER: Klaus, can I say,
you're a bit quiet, actually. You're not near enough
to the microphone.
PRESIDENT SACHS: And the Respondent?
MR. VOLKMER: No.
PRESIDENT SACHS: Okay. So we'll give the
floor to Mr. [Redacted].
[Redacted], RESPONDENT'S WITNESS, CALLED
PRESIDENT SACHS: Let me take the
opportunity to thank you, Interpreter. I have the
impression that your interpretation is very correct.
I don't speak a word of Korean, but the fact there
were no protests so far in the room shows that it must
be very accurate.
THE INTERPRETER: Thank you.
(Pause.)
PRESIDENT SACHS: Good morning, Mr. [Redacted].
Please make yourself comfortable.
Mr. [Redacted], you are a lawyer, so you are aware
[Page 444]
of your duties as a witness of fact, and in front of
you is a Declaration that we would like you to read
out for the record.
THE WITNESS: I solemnly declare upon my
honor and conscience that I will speak the truth, the
whole truth, and nothing but the truth.
PRESIDENT SACHS: Thank you very much.
Mr. [Redacted], you submitted a Witness Statement
in these proceedings dated 13 August 2021. Is there
anything in this Witness Statement that you would wish
to correct at this point in time?
THE WITNESS: There is none.
PRESIDENT SACHS: Thank you very much. So,
we go to direct.
MR. HAN: Respondent has no direct questions
for the Witness. Thank you, Mr. President.
PRESIDENT SACHS: Okay.
So we go to cross.
MS. VAZOVA: Thank you, Mr. President.
BY MS. VAZOVA:
Q. Good morning, Mr. [Redacted].
A. Good morning.
Q. Thank you for being here, sir. So I will be
asking you some questions this morning. My name is
[Page 445]
Lilia Vazova. I'm an attorney for Claimants. Before
we get started, you should have a copy of your Witness
Statement in front of you in Korean. Do you?
A. Yes, I am looking at it.
Q. Great.
And then you should also have a binder of
documents in front of you that we may refer to during
the course of today's examination.
Do you see that?
A. Yes, I am looking at that.
Q. We will also be pulling the documents on the
screen for the rest of us in English, but you should,
of course, feel free to refer to the Korean versions
in front of you.
A. I will do so.
Q. Now, as you just responded--
ARBITRATOR GLOSTER: Sorry to interrupt, but
whilst I can hear--I cannot hear the Interpreter. I
can hear Ms. Vazova perfectly well, but the
Interpreter's microphone is too quiet or not near
enough.
THE INTERPRETER: Would this be better?
ARBITRATOR GLOSTER: That's a bit better.
THE INTERPRETER: Hello?
ARBITRATOR GLOSTER: That's better. That's
[Page 446]
much better. Thank you.
THE INTERPRETER: Thank you.
BY MS. VAZOVA:
Q. Mr. [Redacted], as you just said in response to the
Chairman's question, you submitted one Witness
Statement in this Arbitration; correct?
A. That is correct.
Q. And the date of that Witness Statement is
August 13, 2021?
A. Yes, correct.
Q. When were you asked to testify in this
arbitration, Mr. [Redacted]?
A. Are we talking about today's testimony?
Q. No. I'm talking about the Witness Statement
you submitted in--on August 13, 2021.
A. I don't recall an exact date, but it must be
around one or two years ago.
Q. Who asked you to testify?
A. So, the law firm--attorneys at the law firm
who is representing the Republic of Korea in this case
and the people from the Ministry of Justice visited
our office to make a request.
Q. Had you previously met before the Ministry
of Justice officials that came to your office to ask
you to testify?
[Page 447]
A. It was my first time meeting them, but
before the meeting happened, I received a call from
the Ministry, and I am not sure whether the person who
called me and the person who visited me were the same
person. So the appointment was made through a call,
and the attorneys and the officials at the Ministry
who visited the office were the people that I met for
the first time.
Q. You had previously done some consulting work
for Samsung; right, Mr. [Redacted]?
A. So, about 10 years ago, based on my
recollection, I had represented Samsung Group in its
legal cases; and, since my practice area is labor law,
I was requested to give a lecture at the Samsung Group
multiple times, and I did give a lecture about 100
times and plus.
And I recall it to be around six to seven
years ago or maybe four to five years ago, before
2015.
Q. In your line of work as a lawyer, do you do
any work with the Ministry of Justice?
A. This is the first time working with the
Ministry of Justice.
And for the Ministry of Employment and
Labor, I had represented their cases for quite a long
[Page 448]
time, until four years ago.
Q. You also submitted a witness statement in
another arbitration involving Korea; right, Mr. [Redacted]?
A. Right. I have submitted a witness statement
to the Elliott case.
Q. And you also provided live testimony in that
case as well; right?
A. Yes.
Q. And, in that live testimony, you of course
told the truth; right, sir?
A. That is right.
Q. Now, in addition to the arbitration
testimony that you have provided, you were also
interviewed by the Seoul Central District Prosecutor's
Office on November 28, 2016; correct?
A. Yes, I was interviewed as a witness twice,
once by the District Prosecutor's Office and the other
time would be Special Prosecutor's Office.
Q. Okay. Let's start with the District
Prosecutor's Office interview, first.
If you may turn to Tab 227 in the binder in
front of you. That's Exhibit C-227.
A. Yes, I have it in front of me.
Q. And the title of that document is "Record of
Statement," and then it has your name, [Redacted];
[Page 449]
correct?
A. That is correct.
Q. And that's the record of your statement to
the Seoul Central District Prosecutor's Office from
the interview that took place on November 28, 2016;
correct?
A. That is correct.
Q. You have reviewed the record of your
statement before; correct?
A. Correct.
Q. And after you reviewed the record of your
statement, you affirmed its contents; correct, sir?
A. That is correct.
Q. Can we turn to Page 16 of that document,
please.
So, are you there?
A. I am looking at it.
Q. Okay. And so, as stated here, [Redacted]
[Redacted]; right, sir?
A. That is right.
Q. And you also affirmed that there are no
errors, no additions, and no changes to be made;
correct?
A. That is correct.
[Page 450]
Q. And then you signed and sealed the Statement
Report.
A. Yes, I signed it, and I have the fingerprint
seal on it.
Q. So, that's your signature and your
fingerprint on Page 16, in front of you; right, sir?
A. That is right.
Q. So, let's talk about your interview with the
Special Prosecutor's Office; and, for that, let's turn
to Tab 220 in the binder in front of you. That's
Exhibit 220.
A. Yes, I have it in front of me.
Q. In this document in front of you, Exhibit
C-220 is the record of your statement to the Special
Prosecutor from the interview that took place on
December 28, 2016; right?
A. That is right.
Q. And you've reviewed the Record of this
Statement before, as well; right?
A. That is right.
Q. And after you reviewed the Record of your
Statement, you of course affirmed its contents, as
well; correct?
A. That is correct.
Q. And if we may turn to Page 23 of the
[Page 451]
document in front of you.
A. Yes.
Q. That is your seal and your signature there;
correct?
A. That is correct.
Q. When you were interviewed by the Special
Prosecutor, you told the truth; right, sir?
A. That is right.
Q. And you also told the truth when you were
interviewed by the Seoul District Prosecutor.
A. Yes.
Q. Now, Mr. [Redacted], between 2013 and 2017, you
were a member of a Committee called the Special
Committee for the Exercise of Voting Rights; correct?
A. That is correct.
Q. So, just a point of terminology in this
Arbitration. The Parties have referred to that
Committee as either the "Expert Committee" or the
"Special Committee." You referred to it as the
"Special Committee" in your Witness Statement, so I
will do so as well this morning.
A. Understood.
Q. So, the Special Committee decides how the
Korean National Pension Service will vote on certain
matters; correct?
[Page 452]
A. Yes. The Committee deliberates on the
matters that were requested by the NPS to be
deliberated on.
Q. And some of the matters that the NPS
requests the Committee to deliberate on implicate
issues of corporate governance, for example; correct?
A. I recall having deliberated on around four
matters, and there are different characteristics to
the issues. One item was around the loan, and the
other was around--another one was around the
separation of subsidiaries, and two items were around
the Merger Ratio.
Q. Can you go back to Tab 227 in your binder,
sir.
And I want to ask you about Page 4, the last
paragraph on that page.
And just to orient ourselves, this is the
Record of your Statement to the Seoul Central District
Prosecutor's Office.
A. Yes.
Q. So, when you were asked by the Prosecutor
[Redacted], you responded: "[Redacted]
[Redacted]
[Redacted]."
[Page 453]
Do you see that?
A. Yes.
Q. So, as you told the Prosecutor, some of the
matters on which the Expert Committee--excuse me, [Redacted]
[Redacted]; right?
A. Well, the corporate governance is a broad
and wide and vague term, so I thought the four items
that I testified earlier--loan, and the separation of
subsidiaries, and the Merger Ratio--are intuitively
connected to the corporate governance, so I do not
think that this contradicts with my testimony.
Q. I'm not suggesting it contradicts your
testimony, sir. I'm just asking whether the matters
on which the Committee deliberates include issues of
corporate governance, however vague or broadly defined
you understand that term to be.
A. Yes. I think most of the issues would be
intuitively possible to be related to the corporate
governance.
Q. And [Redacted] that you identified to the
Special Prosecutor [Redacted]
[Redacted]; correct?
A. Correct.
[Page 454]
Q. And, as you also told the Prosecutor, [Redacted]
[Redacted]
[Redacted];
correct?
A. Yes. After discussions and deliberation at
the Committee, the collective decision was to vote
against them.
Q. So, if you can turn to Page 2 of your
Witness Statement, Footnote 1, you cite a number of
different documents there that I want to ask you
about.
A. Okay.
Q. And these documents that you cite in
Footnote 1 of your Witness Statement, they're all
materials you were familiar with in your work on the
Special Committee; right?
A. So, every time we hold a meeting, the NPS,
who was preparing the meeting, copied either part or
all of the documents and had our members of the
Committee check them, so these are the guidelines that
we check almost every time.
Q. You didn't review the documents for the
first time in preparing your Witness Statement; right?
A. That is right. NPS refers some matters,
according to the guidelines, and we also made
[Page 455]
deliberations referring to the guidelines, so these
guidelines are familiar with me.
Q. The first document you cite in Footnote 1 is
Exhibit R-144. That's the National Pension Fund
Operational Guidelines, so I want to ask you about
that. And if you may turn to Tab 144 in the binder in
front of you, that's Exhibit R-144.
A. I am looking at it.
Q. So, this document, the National Pension Fund
Operational Guidelines, this is the guideline for the
general operation of the National Pension Fund;
correct?
A. So, when we are making a deliberation at the
Committee, not all of the guidelines were given to us.
Only the part that were related to the Special
Committee were given to us, so I would say Article 5.5
of the Guidelines, only the excerpts of that was
provided to us when we were making a deliberation at
the Committee, and the rest of the document hasn't
been reviewed by us.
And there is another Article that I am
familiar with that is Article 17, and specifically
Paragraph 4 under Article 17. That is also in
relation to the Special Committee, so that was
provided to us. So, as such, only the parts that are
[Page 456]
necessary for the Special Committee have been
extracted and given to us, so we did not review the
rest of the document, and it was not necessary for us
to review the rest of the document, either.
Q. Okay. So, now I'm a little confused. I
thought you testified a minute ago that you had
reviewed these materials before you cited them in your
Witness Statement. Was that not correct?
A. What I meant was that I reviewed and
referred to the document within the scope of that--of
which that relates to the Special Committee.
Q. Okay. So, the only parts of Exhibit R-144
that you had ever reviewed were Article 5.5 and 17.4;
is that your testimony?
A. That is correct. I am not familiar with the
rest of the provisions.
Q. So, you don't know, one way or the other,
whether this document is a guideline for the general
operation of the Pension Fund.
A. Yes. In fact, if you look at a certain part
of the document, then it is clear that this guideline
is a guideline that comes above the Guidelines for the
Special Committee in the National Pension Service, so
only the parts that are necessary were given to us for
review.
[Page 457]
Q. I understand your testimony as to the parts
that are applicable to the work of the Special
Committee. My question was a little different.
Do you have an understanding, one way or the
other, whether this document, National Pension Fund
Operational Guidelines, are supposed to be a guideline
for the general operation of the National Pension
Fund?
A. Well, the applicable provisions were given
to us, and I believe that the other Special Committee
members thought that they were relevant to them as
well, but the rest of the provisions, the Special
Committee members, including myself, didn't think
deeply about their intent or content, so I cannot say
that I understand the meaning of the rest of the
document.
Q. Let's turn to Page 1 of the document. I
want to show you Article 2, which I suppose you have
never seen before, so let's turn to Page 1, Article 2.
A. Which tab are we talking about?
Q. Oh, apologies. We're still on Tab 144.
And I misspoke earlier. I meant Article 1,
subsection 2.
A. Yes, I am looking at it.
Q. And you see there, under Article 1,
[Page 458]
subsection 2, how the document is described as a
guideline for the general operation of the Fund?
A. Yes, I see that.
Q. Do you have any reason to doubt that
description?
A. Well, I didn't see this part in my normal
work, and this is the first time that I'm seeing this,
so I'm not in a position to say in any ways, and,
plus, I do not have any experience with this
provision.
Q. Okay. This document, the National Pension
Fund Operational Guidelines, it was issued by the
Korean Ministry of Health and Welfare; right, sir?
A. It seems to be that way. It has the
Ministry of Health and Welfare in it, the name in it.
Q. That's the Ministry of Health and Welfare's
logo on the first page; correct?
A. Yes, it seems so.
Q. The Special Committee operated under the
Ministry of Health and Welfare; right, sir?
A. So, about the hierarchy or the relationship
between the Ministry of Health and Welfare and the
National Pension Fund, we didn't address that or dealt
with that in a serious manner. So, I did not have a
big--I was not fully conscious or aware of where the
[Page 459]
Committee sits, specifically when I was working,
because our group, the Special Committee, is an
independent group of people who are coming from the
outside of the Ministry of Health and Welfare and the
National Pension Service.
So, we didn't really think deeply about the
relationship between the Ministry of Health and
Welfare and the National Pension Service.
Q. So, you don't know, one way or the other,
whether the Special Committee was part of the NPS or
the Ministry of Health and Welfare?
A. The secretaries came from both entities, the
National Pension Service and the Ministry of Health
and Welfare, but we were operated on a independent
way.
So, intuitively, I was able to think that
they had some relation to the entities, but we didn't
think that these entities are upper bodies that are
governing us, so we didn't--I have never thought that
the actions or measures taken by the NPS or the
Ministry of Health and Welfare to be binding on our
activities.
Q. So, from your perspective as a member of the
Special Committee, the Ministry of Health and Welfare
and NPS were one and the same thing?
[Page 460]
A. So, I didn't really give a serious thought
into the relationship between the two; and, whenever a
new administration comes in, it became a big headlines
in the Korean media that the NPS should have an
independence.
So, I was able to have an impression that
these two entities are involved with the Special
Committee, but whenever we were asked to deliberate on
some matters, we made the deliberations independently.
And when the matter came to our table, I
almost didn't care about what the Ministry of Health
and Welfare's position would be on that issue or the
National Pension Service's position would be on the
issue, and made an independent deliberation.
Q. Understood.
Let's move on to the next document you cite
in Footnote 1 to your Witness Statement. That's
Exhibit R-55. That's the Guidelines on the Exercise
of the National Pension Fund Voting Rights. And
that's going to be behind Tab 55 in your binder.
A. Yes, I am looking at it.
Q. Are you familiar with this document?
A. Yes. I recall having a copy of the full
document with all the provisions in it provided to us
when we had a meeting.
[Page 461]
Q. Okay. So, unlike the document we looked at
earlier, this document you actually familiar with in
its entirety, not just parts of it?
A. Well, not necessarily. We received the full
document, but the one that is related specifically to
the Special Committee is Article 8, and more
specifically Article 8.2. So, I did have a look at
Article 8.2. And the document in its entirety was
provided to us, and I did review that, but I didn't
pay full attention to the document in its entirety.
Q. So, this document, R-55, Guidelines on the
Exercise of the National Pension Fund Voting Rights,
it establishes the standards, methods, and procedures
for the exercise of Voting Rights by the Fund;
correct?
A. Yes, that is how I read it.
Q. And the Special Committee was required to
follow these guidelines in making decisions on how the
National Pension Fund would exercise its Voting
Rights; right, Mr. [Redacted]?
A. Well, I would say that the--not all of the
document had been deeply looked at, and there are many
provisions that are related to how the Investment
Committee should make a decision before the matter is
referred to the Special Committee in this document.
[Page 462]
So--and there is a separate guidelines for
the Special Committee, once the matter is referred to
the Special Committee. So, when I was deliberating on
the matters, I didn't think that the Special Committee
would need to follow all these guidelines that are
specified herein. Only the ones that are related the
Special Committee would apply. That was the
impression that I had.
Q. Okay. Let's look at Article 2 of Exhibit
R-55, that's on Page 1.
A. Yes, I am looking at it.
Q. So, Article 2, "Scope of Application,"
reads: "The Exercise of Voting Rights of Shares held
by the fund shall be conducted in accordance with the
Guidelines, except as otherwise provided by relevant
laws and regulations."
Do you see that?
A. Yes, I see that.
Q. So, is it your testimony that the Special
Committee was not required to follow the Guidelines in
Exercising the Voting Rights of the Fund?
A. Well, that is not my intent. Within this
document, there would be provisions that are related
to the Special Committee and that are not related to
the Special Committee. And the Article that you have
[Page 463]
shown me is a general provision, so it will apply to
the Special Committee in principle.
But to this sort of general provisions,
there was rarely an occasion where the Special
Committee members had a meaningful discussions or
debate on how to interpret or apply it.
Q. Okay. So, pursuant to this general
provision, Article 2, "Scope of Application," the
Guidelines do apply to the Special Committee; right,
sir?
A. Yes, I agree that this would apply to the
Special Committee, but what I would like to say is
that there was no occasion where we discussed or
debated whether this would apply to the Special
Committee.
Q. I understand it wasn't discussed or debated.
Let's move on to Article 3. That's the
next--the next Article down.
Article 3, "Fiduciary Duty," reads: "The
Fund shall exercise Voting Rights in good faith for
the benefit of the subscribers, former subscribers,
and public pension-holders." That's what it says;
right?
A. That is right.
Q. And this Article 3, "Fiduciary Duty," also
[Page 464]
applied to the Special Committee when the Special
Committee voted on Exercising the Voting Rights for
the Fund; correct?
A. Yes, I agree that this applies to the
Special Committee.
Q. Let's move on to Article 4, "Increasing
Shareholder Value."
Article 4 reads: "The Fund shall exercise
its Voting Rights to increase Shareholder value in the
long term." Right?
A. Right.
Q. And this Article 4, "Increasing Shareholder
Value," also applied to the Special Committee when the
Special Committee decided how to exercise Voting
Rights of the Fund; right, sir?
A. Yes, I agree.
Q. And let's move to another one, Article 4-2.
That's the next one down.
Under "Responsible Investment," Article 4-2
says: "The Fund shall exercise its Voting Rights in
consideration of factors of responsible investment,
such as the environment, society, and corporate
governance in order to enhance long-term and stable
rate of return." Right?
A. That is right.
[Page 465]
Q. And this Article 4-2, "Responsible
Investment," also applied to the Special Committee
when the Special Committee decided how to exercise the
Fund's Voting Rights; right, sir?
A. Yes, I agree.
Q. Let's move on to the third document you cite
in Footnote 1 to your Witness Statement. That's
Exhibit R-145. That's going to be behind Tab 145 of
your binder.
A. Yes, I have it.
Q. And this Document R-145, "Regulations on the
Operation of the Special Committee on the Exercise of
Voting Rights," governs the operations of the Special
Committee of which you were a member; correct?
A. That is correct. I almost always looked at
these regulations, and most of the members of the
Special Committee tried to operate the Committee in
compliance with this regulation.
Q. As a member of the Special Committee, were
you able to exercise your vote freely?
A. The debates were done in a very free manner.
You would be expected--sorry, strike that.
You would consider the entity that
recommended you to the Committee. But in the process
of discussion and debate, when there is some--a
[Page 466]
reasonable point that is made by other members, then
even when that reasonable point may be in opposition
to what the entity that recommended you to the
Committee, that member would likely to change their
mind to a reasonable, you know, manner.
And the decision-making at the Committee was
done in an autonomous and independent manner and
even--sorry.
And the decisions were not made before the
meeting, and the decisions were made after the
discussions that were made freely at the meeting. And
many members found it a little surprising, too.
Q. So, no one told you how to vote; right? The
decision how to vote was yours and yours alone?
A. I don't know what went into respective
members' minds when they made a decision, but there
were many people who changed their mind after debate
and discussions. And, in my case, I was recommended
by an organization that represents the employers. So,
if you look at a--at the cases from the employers'
perspective, the three cases that were mentioned
earlier must have been affirmed by me, but I ended up
voting against them after the discussions with the
members of the Committee.
So, I could have been requested to--I could
[Page 467]
have been given some requests before or after the
meetings, but I was never bound by such requests.
Q. Okay. So, ultimately, the decision of how
to vote was yours and yours alone; right, sir?
A. Yes. It was up to the conscience and
liberty of the members.
Q. Did you always do your very best to act in
the best interests of the National Pension Service
when deciding how to vote on a particular issue?
A. Yes. According to the principles set out in
these regulations and guidelines, I had the mid- to
long-term interest of the National Pension Service in
mind, and that was the biggest decision-making
standard that we had, and I believe that was the same
for the other members of the Committee.
Q. So, both for and you the other members of
the Committee, first and foremost, was always the best
interests of the National Pension Service?
A. Yes, there was the shared motive of
promoting the best interests of the National Pension
Service among all the members. But after the debate,
whether the "Yes" vote would be in the interest of the
NPS or the "No" vote would be in the interest of the
NPS would depend on individual members' discretion.
It will depend on their expertise, their conscience,
[Page 468]
and their rationale.
Q. I understand that. Leaving the debates
aside, when casting their votes, did you and your
colleagues on the Special Committee always try to do
so with the best interests of the National Pension
Service in mind?
A. I can say with my conscience that I did so,
and I believe that other members of the Committee did
so, too. And when there is a clarity around what is a
reasonable decision after the debate, there was
many--there were many cases when the members of the
Committee would change their mind to the direction of
reasonableness.
And there--while there were still some
people who might not change their mind, but still the
majority moved to the direction of rationality and
reasonability after the debates. That is my
experience.
Q. When the Special Committee considered how to
exercise the Fund's Voting Rights, it considered
whether a proposed transaction would cause damage or
profit to the Fund; correct?
A. That is correct.
Q. In fact, that's the top priority for the
Special Committee; right, sir?
[Page 469]
A. That is right.
Q. Let's go back to Exhibit R-144. That's
Tab 144 in your binder.
A. I am looking at it.
Q. And this time I want to ask you about an
article on Page 2. That's Article 4 on Page 2, "Fund
Management Principles."
A. I am looking at it.
Q. So, Article 4(1), "Principle of
Profitability" states that: "Returns must be
maximized in order to alleviate the burden on the
insured persons, especially the burden on the future
generations." Right?
A. It reads so, yes. And I understood it to be
a given, but when we were having a deliberation, I
don't remember this provision provided to the members.
Q. Okay. So, setting this specific provision
aside, when the Special Committee deliberated, did it
consider whether the proposed transaction would
maximize returns for the National Pension Service?
A. Yes. That is always a top priority of
consideration of us--of ours.
Q. Let's go back to R-55. That's Tab 55 in
your binder, and I want to ask about Article 6 that's
on Page 1.
[Page 470]
A. Yes, I have it.
Q. So, Article 6, "Fundamental Principles of
Exercise of Voting Rights," states as follows: "The
standards for exercising Voting Rights on individual
items shall be determined on the basis of the
following fundamental principles."
And then under subsection 2, it says: "If
the item goes against the interests of the Fund or
decreases Shareholder value, the Fund shall vote in
opposition."
A. Yes, I am reading it, too, and I agree.
Q. When you say you "agree," do you mean that's
when the Special Committee discussed how to exercise
the Fund's Voting Rights, it considered whether the
proposed transaction would go against the interests of
the Fund or decrease Shareholder value?
A. I agree that this provision will need to be
followed, and I believe that the members of the
Committee take--took action with this mindset, and I
can testify that I made my decisions according to this
provision.
Q. When the Special Committee considered how to
exercise the Fund's Voting Rights, did it consider the
views of the National Pension Service's financial
advisors?
[Page 471]
A. The ones that were deliberated by the
Special Committee, when it comes to the gains or the
interests of the National Pension Service, if those
interests can be calculated, then the financial
profits or damages could be calculated as well. But
most of the time, the interests that were--that were
at issue were the morality, ethics, principles, and
the trust from the citizens, and they are related to
the mid- to long-term interests of the National
Pension Service.
Q. Okay. So, did the Special Committee
consider or not consider the views of financial
advisors when deciding how to exercise the Fund's
Voting Rights?
A. Of course, that was considered, but--of
course, that was considered, and when there was
numbers presented, we considered those numbers. But,
in most cases, financial numbers were not suggested.
And the thoughts or the belief of the
Special Committee was as follows: The--when the Board
of Directors make a certain decision and it goes
against the morality and the principles, then it will
undermine the long-term interests of the National
Pension Service. And most of the debates that were
held at the Special Committee was in this direction,
[Page 472]
that if you keep the morality and the ethics, then it
will benefit the National Pension Service in the
long-term.
So, as a result, most of the discussions did
not center around the financial numbers, but it tended
to be centering around the ethics and the principles.
MR. HAN: Mr. President, can I make a very
short question to the interpretation?
So, if you look at time stamp 9:42:34, "when
the Board of Directors make a certain decision,"
Mr. [Redacted] said "Shareholder Boards Meeting," not "Board
of Directors."
THE INTERPRETER: Oh, yes. Sorry. That was
not "Board of Directors" but the "Shareholders'
Meeting." Thank you for the correction.
PRESIDENT SACHS: Is this all right?
MR. PARK: Yes.
PRESIDENT SACHS: Thank you.
MS. VAZOVA: Thank you for the
clarification.
BY MS. VAZOVA:
Q. Now, Mr. [Redacted], switching gears a little bit.
I want to ask you about the Samsung C&T-Cheil Merger.
Now, because the National Pension Service
was the largest Shareholder of Samsung C&T, it held
[Page 473]
the casting vote on the Merger; right?
A. I knew that the NPS had a casting vote
because there were media reports on that, but I didn't
know that the NPS was the largest Shareholder.
Q. Can we turn to Tab 220, which is your
Statement to the Special Prosecutor. And we're going
to be looking at Page 23 of the English version, and
for you, Mr. [Redacted], it's going to be Page 21 of the
Korean version.
A. Yes.
Q. So, the first full paragraph states a
question by the Prosecutor: "[Redacted]
[Redacted]"
And then you respond: "[Redacted]
[Redacted]
[Redacted]
[Redacted]
[Redacted]."
That's what you told the Prosecutor; right,
Mr. [Redacted]?
A. I think I did mention the "[Redacted]"
part, but I don't remember checking the "[Redacted]
" part. I think when the Special
[Page 474]
Prosecutor was making this document, he must have put
the fact in after checking the fact. The Hearing
didn't happen, so I didn't have an opportunity to
check the facts with regards to this particular case,
so I don't remember saying this when I was giving an
answer to the interview.
I think when the Prosecutor was sorting out
my answer and putting it into a document, the fact
that he or she was aware of was included in it.
Q. You did review this Record of Statement
before you signed and sealed it; right, Mr. [Redacted]?
That's what you told us earlier.
A. I did review the whole document, and I
thought that the overall intent in the document was
correct, but I didn't particularly look into whether
the NPS was the largest Shareholder of Samsung C&T or
not. But it really doesn't affect the overall intent
or the direction of my Testimony, so I didn't give
much care into it.
Q. There are no facts--
MR. HAN: Mr. President, I'm sorry, there is
another very minor interpretation issue, so can I just
check with the Interpreter?
PRESIDENT SACHS: Yes, please.
MR. HAN: Look at the time stamp
[Page 475]
9:47:44--actually, from 37, so Mr. [Redacted] says, "the
hearing did not happen," but as I recall Mr. [Redacted] said
"shimri," so "shimri" so it should be interpreted as
"deliberation" or "discussion," not the "hearing."
THE INTERPRETER: I concur.
BY MS. VAZOVA:
Q. Just to make clear, Mr. [Redacted], as to the
Prosecutor's recording your statement, it is not your
testimony, is it, that the Prosecutor was at liberty
to just add random facts to the Witness Statement, to
the Statement of Record, that you disagreed with?
A. That's not exactly correct. As you can see,
the interview took place from 3:00 p.m. until
9:00 p.m., so it went on for a--long hours. And a lot
of the questions were given to me with an expectation
of a certain answer. And when the expected answer
doesn't come out, many of the answers that I had given
didn't go on the record.
And it was around the six-hour mark, so I
was very exhausted, and so I only checked the big flow
of what I said, and the important parts of my
testimony, and the minor ones have been just looked
over.
And if I can say that the most important
parts overall had been mostly checked.
[Page 476]
Q. Can we turn back to Page 25 of the document
in front of you, sir. We looked at that language
earlier.
A. Which document?
Q. 220, Tab 220.
A. I am looking at Tab 220.
Q. And as you testified earlier, sir, when you
were shown this Record of Statement before you signed
and sealed it, you answered that [Redacted]
[Redacted]; that's correct, right?
A. That is right. And in most cases, what is
written here is a pre-printed statement. The fact
that many parts of what I actually said were not on
the record, and some of the expressions were slightly
modified to what the Prosecutor wanted it to be, could
be the case, but if it was overall correct, then we
kind of have to wrap it up there. If we start
debating the exact wording that is written in the
document, then it will go endless.
And this statement is a pre-printed
statement in every Statement Report, so the wording
such as "[Redacted]"
may be inaccurate in some cases.
Q. You're a lawyer; right, sir? Is it your
[Page 477]
habit to sign and seal documents without reading them
or without agreeing with their contents?
A. That is not the case. Whether it was a
largest shareholder or not is not really important or
meaningful in this document.
So, some of the facts that were included in
the document may not be something that I said, but
still I didn't think of them as important, so I just
looked over that.
Q. That's not what you said here, though. You
didn't say "the general flow is correct," you didn't
say "most of the facts were correct." You said there
were "[Redacted]."
That's the language you certified to.
A. So, this statement is a pre-printed
statement in any of the Prosecutor's Statement Report
document; and, during the clarification process of the
content of the Statement Report, there could be some
recording that is in contrast with the existing
document. And many of what I said has not been
reflected to this document by the Prosecutor. So
here, if you look at the wording that is printed in
Korean, it says "[Redacted]," and there was
reduction.
And why did it look over? Because, if we
[Page 478]
1 start asking about what the specifics, then it
2 will--the interview would not end, so a lot of the
3 things that I said and that were not in line with the
4 Prosecutor's expectations were omitted in this
5 document.
6 So, if there was an addition or a reduction,
7 yes, there was reduction. But if I refused to sign,
8 then how could the interview end? So, you could
9 understand it as such. The overall direction was
10 correct, and the important meanings were checked, and
11 I signed it.
12 Q. You were given the opportunity to clarify or
13 correct; right?
14 A. So, it was a six-hour-long interview, and
15 this particular Prosecutor, unlike the earlier General
16 Prosecutor, created a rather short document after a
17 long discussion, so I could say that this Report is
18 full of omission. But I was exhausted, and the
19 Prosecutor and I agreed that if it is in the large--if
20 it is in line with the large flow, then we should just
21 end the interview.
22 And I was given an opportunity to make a
23 clarification or correction, and I looked at the
24 Report, and I found no significant areas that should
25 be added or reduced, so that is how I signed it and
[Page 479]
1 ended the interview.
2 Q. You said a couple of times that this
3 language was pre-printed; right?
4 A. Yes, that is a typical statement in
5 every--the Report.
6 Q. So is it your testimony that when you
7 certified the language that was pre-printed, you don't
8 necessarily mean it?
9 A. That's not what I mean. What I mean is that
10 the meaningful parts have been mostly checked. And
11 for the parts that are not considered important, I
12 think as an attorney, I think all the documents will
13 need to be understood in a way that all the documents
14 would have some omittances and some requirements for
15 further clarification.
16 Q. So, there were no material omissions or
17 errors in these Statement Reports, as they were
18 presented to you, before you certified them?
19 A. So, I would say "yes," in the scope of the
20 Prosecutor's question. And in the process of
21 clarifying the direction of the Prosecutor's question,
22 there may be some areas that should be corrected and
23 clarified.
24 And there would be a possibility of addition
25 in the course of such process, and plus there could be
[Page 480]
1 some areas that will need to be removed with the
2 possibility of misunderstanding as well.
3 But with regard to the questions given from
4 the Prosecutors and within the meaningful scope, the
5 general content was correct. Please understand my
6 testimony in such a way.
7 Q. I understand it.
8 So, it's your view as well,
9 sir--right?--that no reliable prediction could have
10 been made as to how the Special Committee would have
11 voted on the Samsung Merger. Correct?
12 A. In fact, that was the question that the
13 Prosecutor lingered on for the longest time. That
14 question went on for about more than an hour.
15 If the item was to be referred to the
16 Special Committee, would the Special Committee vote
17 against it? Would the Special Committee have voted
18 against it? And to that question, I said no one can
19 make a prediction. There is uncertainty, and I
20 continued on answering that no one could have made a
21 prediction, for a long time. The Prosecutor and I
22 compromised and agreed on the phrase there was
23 certainty--[Redacted] instead of nobody
24 knows, but my exact wording in the answer was that no
25 one can make a prediction.
[Page 481]
1 Q. And just so we're clear, the Special
2 Committee never had the opportunity to consider the
3 Samsung Merger; correct?
4 A. Correct. We did not deliberate on it.
5 Q. And that was because the Samsung Merger was
6 never referred to the Committee for a vote; right?
7 A. That is right.
8 Q. So, one proposed merger that the Special
9 Committee did have an opportunity to consider was the
10 merger between two companies of the SK Group; right?
11 A. Can you ask me the question once again?
12 Q. Sure.
13 One merger that the Special Committee had
14 the opportunity to consider, because it was referred
15 to the Committee for a vote, was the merger between
16 two companies of the SK Group.
17 A. Yes. The item that was deliberated in my
18 term that is related to a merger was the SK Merger
19 one.
20 Q. And the SK Merger was referred to the
21 Special Committee for about approximately one month
22 before the NPS had to decide how to vote on the
23 Merger--on the Samsung Merger? Excuse me.
24 A. That was in May, so I think it was around
25 one or two months before then, yes.
[Page 482]
1 Q. And the Special Committee decided that the
2 National Pension Service should vote against the SK
3 Merger; right?
4 A. Yes. We had multiple and long-hour
5 discussions on this matter as well. And in the course
6 of--sorry.
7 In the course of the discussions, the
8 collective decision changed over time from a favorable
9 direction to a negative decision.
10 Q. So, the Special Committee decided to vote
11 against the SK Merger; correct?
12 A. Correct.
13 Q. Let's turn to Paragraph 16 of your Witness
14 Statement.
15 A. I am looking at it.
16 Q. So, as you explain in this Paragraph 16 of
17 your Witness Statement, the SK Merger included a
18 proposal on how to treat treasury stock that concerned
19 you?
20 A. Yes.
21 Q. And the problem with the treasury stock was
22 that it could undermine the interests of the
23 Shareholders of the SK company that owned the greater
24 proportion of that stock; right?
25 A. So, SK had the share of treasury stocks of
[Page 483]
1 over 20 percent--it was quite high--and the new Shares
2 were not assigned to the treasury stocks, and they
3 were to be retired afterwards. So, for the
4 Shareholders in the side where the more portion of the
5 treasury stocks were held, the number of new Shares
6 that would be allocated would go down.
7 So, it was found that the Shares in the side
8 where the more treasury stocks were held would be
9 unfairly treated.
10 So, to give you more context, when the new
11 Shares are allocated after the treasury stocks retire,
12 then a hundred Shares would be allocated, but when the
13 allocation happens before the retirement of the
14 treasury stocks and only 80 would be allocated.
15 So, either the retirement of the treasury
16 stocks had been in before or after the allocation are
17 all legal, so it was not the legal--legality issue.
18 But since the treasury stocks were to be retired
19 afterwards, the Shareholders of the entity where the
20 proportion of the treasury stock was higher, would
21 have to suffer some losses.
22 So, based on the Special Committee's
23 discretion, we decided based on the morality
24 principle.
25 Q. So, the impacts of the treatment of treasury
[Page 484]
1 stocks that you just described, was what it would
2 cause the loss to the NPS; correct?
3 A. That was not directly related to the NPS's
4 loss because the Shares that NPS held in the SK
5 Holdings and the SK C&C were the same. So, if one
6 loses, the other would have the same amount of
7 benefits, profits. So, there was no loss that was
8 calculable.
9 However, if you look at it from the fairness
10 perspective, the Chairman of the SK Group held more
11 percentage of Shares in SK C&C, so the Shareholders in
12 the entity that the Chairman of the group held more
13 Shares then would benefit and then the Shareholders in
14 the entity where the Chairman had less percentage of
15 Shares would suffer losses, so there was some
16 imbalance between the two entities.
17 For the NPS's perspective, it was plus and
18 minus equaling zero, but from the perspectives of the
19 Shareholders, there was an element of unfairness, and
20 the NPS could not agree with that. If NPS agree with
21 such unfairness, then it will lose trust from the
22 public, and this would be a long-term loss for the
23 NPS. That was our overall view, and that is how we
24 made a decision.
25 MR. HAN: Mr. President, while we're on this
[Page 485]
1 issue, can I make one simple clarification in terms of
2 interpretation with the Interpreter?
3 PRESIDENT SACHS: Yes, please proceed.
4 MR. HAN: If you look at time stamp
5 10:15:15, it reads, "so based on this Special
6 Committee's discretion," but as I recall, Mr. [Redacted] said
7 in Korean "hwaesa jaeryang," so not "Special
8 Committee's discretion," but "SK's discretion." Can
9 counsel for Claimants confirm us that whether that is
10 correct? I mean, any comments on this proposed
11 correction?
12 (Comments off microphone.)
13 MR. PARK: I would agree with you that the
14 "discretion" is not the "Special Committee," but I
15 think what Mr. [Redacted] was referring to was the discretion
16 when to retire the Shares, even though there was a
17 discretion in that regard, based on morality they
18 decided against it. I think that was what he was
19 trying to explain, not the Company's discretion.
20 PRESIDENT SACHS: Maybe this can be put to
21 the Witness so that he can confirm or correct his
22 earlier statement? We're talking about statement at
23 10:15:15.
24 THE WITNESS: So, that would be a discretion
25 of the Parties to the Merger, but more specifically it
[Page 486]
1 would be the discretion around whether to retire the
2 treasury stocks. And depending on the timing of the
3 retirement of the treasury stocks, as I said earlier,
4 the amount of stocks that would be allocated to the
5 Shareholders would change, so you saw it correctly,
6 that the expression is around when and whether to
7 require--retire the treasury stocks.
8 BY MS. VAZOVA:
9 Q. Okay. Let me see if I can try to break this
10 down a little bit.
11 So, there was discretion as to the timing of
12 retiring treasury stocks; correct?
13 A. That is correct.
14 When the timing should be is not a legal
15 issue. That is what I have been told, and that is
16 what I have understood.
17 Q. So, the Company could have done that on one
18 point or other, depending on its discretion?
19 A. Yes. And despite that if the allocation
20 happened after the retirement of the Shares, then it
21 would have been more fair to the Shareholders in the
22 entity where the proportion of the treasury stocks
23 were higher, and there wouldn't have been an
24 unfairness issue, then. And if so, it is likely that
25 the Special Committee voted Yes for that.
[Page 487]
1 Q. But even though there was no problem with
2 the timing of when the stocks were retired, the
3 Special Committee still rejected the Merger because,
4 under the approach adopted by the Company, the
5 founding family of the Company would unfairly benefit
6 at the expense of the other Shareholders; correct?
7 A. So, more precisely put, it was not exactly a
8 question of whether the owner Shareholders and the
9 other Minority Shareholders are in confrontation. It
10 was more about the two companies, one company where
11 the Chairman or the owner had more percentage of
12 Shares in, and the other company where the proportion
13 of treasury stocks were higher.
14 And between the two companies, the Minority
15 Shareholders of the earlier companies would gain
16 compared to the other company, so it was not exactly
17 in a collision between the owner Shareholder and the
18 Minority Shareholder, but it should be understood that
19 it was a relative gain for all of the Shareholders in
20 the Company where the Chairman had more Shares in than
21 for all the Shareholders in the other company. An
22 imbalance between the shareholders depending on the
23 company.
24 Q. Can you turn to Tab 227 in your binder,
25 page--the English version is going to be Page 5, the
[Page 488]
1 Korean version also Page 5. And we're going to be
2 looking at the last paragraph.
3 And you were asked the following question;
4 right, Mr. [Redacted] ?
5 [Redacted]
6 " [Redacted] " Do you see that?
7 (Overlapping interpretation with speaker.)
8 THE INTERPRETER: That was him asking you
9 what page it is.
10 MS. VAZOVA: Oh, excuse me. Page 5,
11 Tab 227.
12 THE WITNESS: Yes, I see it. Yes.
13 BY MS. VAZOVA:
14 Q. So, when you were asked by the Prosecutor
15 [Redacted]
16 [Redacted] , you responded
17 as follows: " [Redacted]
18 [Redacted]
19 [Redacted]
20 [Redacted]
21 [Redacted] "
22 [Redacted]
23 Then you went on to say: " [Redacted]
24 [Redacted]
25 [Redacted]
[Page 489]
1 [Redacted]
2 [Redacted] "
3 [Redacted]
4 That's what you said, right?
5 A. I actually explain this in detail, but as
6 the Prosecutor was summarizing, what I explained in
7 detail, it left some room for misunderstanding.
8 So, to be more precise, the Shareholders in
9 a company where the large shareholder had more Shares
10 in, and these Shareholders in the other company were
11 in the opposite direction.
12 And even though I explained this in detail
13 to the Prosecutor, he didn't seem to get it so well,
14 and I checked the content afterwards, and it didn't
15 really hurt the overall flow, so I just let it stay
16 this way.
17 Q. Was what the Special Prosecutor summarized
18 here accurate or not accurate, Mr. [Redacted] ?
19 A. Here, we have a term, Ordinary Shareholders,
20 and I think there should be more specification
21 attached to it because it can be misleading if it is
22 just written as Ordinary Shareholder, so what it
23 should be is that the Ordinary Shareholders of the
24 other entity.
25 So, if it is understood as the Ordinary
[Page 490]
1 Shareholders in the same entity, then it is a
2 misunderstanding. The Ordinary Shareholders in the
3 other entity opposed to the entity where the largest
4 shareholder holds more shares, would be the right way
5 to put it.
6 Q. Any other corrections you want to make to
7 this?
8 A. So, if we only--about the wording that is
9 related to the unfair capital decrease, I could make a
10 clarification there as well. I explained about the
11 exercise of discretion in the timing of the retirement
12 of treasury stocks, then, so we could clarify this as
13 the unfair exercise of discretion with regard to the
14 retirement of treasury stocks.
15 Q. Okay. Now--
16 PRESIDENT SACHS: I'm sorry, Ms. Vazova, we
17 are approaching--
18 MS. VAZOVA: I was going to suggest that,
19 Mr. Chairman.
20 PRESIDENT SACHS: Before we do, Mr. [Redacted] , we
21 need a clear testimony, and I'm a little bit lost now
22 regarding your corrections as compared to the
23 statements that we find here in the document Tab 227.
24 Now, here you are stated to say on Page 5,
25 which I quote, " [Redacted] ,
[Page 491]
1 [Redacted] ," whereas in
2 your testimony today you seem to say, well, for the
3 NPS, it was neutral. But here you are quoted saying
4 that " [Redacted] ."
5 [Redacted]
6 So, how do you reconcile those two
7 statements, or do I understand you incorrectly?
8 THE WITNESS: Thank you so much for that
9 question for clarification.
10 As I explained earlier, in the short term,
11 NPS held similar amount--similar percentage of Shares
12 in SK and SK C&C, so the entity that the Chairman had
13 more Shares in would gain, and the other entity would
14 lose. So, overall financially, NPS's profit and
15 losses would be unclear in the Merger case. But there
16 still was a morality issue that I mentioned earlier.
17 And because of the exercise of discretion,
18 Shareholders in one company would be unfairly treated.
19 And in this situation, if NPS supports the unfair
20 decision by or the immoral decision by a company, then
21 it will end up losing the trust from the public.
22 So, in the short term, the impact on the NPS
23 could be neutral, but in the mid- to long-term, it
24 would be a loss for the NPS.
25 So, in the earlier part of my testimony to
[Page 492]
1 the Special Prosecutor, I mentioned that the Ordinary
2 Shareholders, including the NPS, would have their
3 interests threatened, and this will need to be
4 understood in twofold: The short-term interest and
5 the mid- to long-term interest related to morality,
6 and only by understanding it twofold there would be no
7 room for misunderstanding with regard to my testimony.
8 PRESIDENT SACHS: Thank you.
9 We will now have our break.
10 MR. HAN: Mr. President, I'm sorry--
11 PRESIDENT SACHS: Is there an interpretation
12 issue?
13 MR. HAN: Yes. I have a fresh memory, I
14 would like to point out some interpretation now, if I
15 may.
16 Can you take us to time stamp 9:54:38. Can
17 you put that on the screen so that the Interpreter and
18 everyone can see. Thank you.
19 As I recall, Mr. [Redacted] testified that "gumsaga
20 wonhaneun pyohyundaero yakgan dalajin bubun." In
21 English it should be "expressions were slightly
22 modified in a way that the Prosecutor wanted to be,"
23 but here the translation is "the expressions were
24 slightly modified to suit what is expected or what
25 could be the case."
[Page 493]
1 PRESIDENT SACHS: I turn to the Claimant.
2 Do you remember that statement?
3 MR. PARK: Thank you, Mr. President. I
4 think this portion we will need to double-check the
5 Korean recording.
6 PRESIDENT SACHS: Okay. Maybe since the
7 Witness is present, could you please, Interpreter,
8 show him the passage.
9 We're talking about 9:54:38.
10 THE WITNESS: Well, what I intended to say
11 here was, in front of the Prosecutor, I said that
12 nobody could have predicted, but the Special
13 Prosecutor slightly modified it to that there is
14 uncertainty, and I agreed to make such slight
15 modifications. And upon the request from the Special
16 Prosecutor, more direct expression had been modified
17 to the expression that is written in the document.
18 So, upon the request from the Prosecutor
19 would be the right way to put it.
20 PRESIDENT SACHS: Okay. That's now on the
21 record.
22 MR. HAN: The Claimants took the Witness to
23 two Statement of Records made to the Prosecutor and
24 the Special Prosecutor, and those two statements were
25 interpreted as Witness Statements, but actually at
[Page 494]
1 that time Mr. [Redacted] was not testifying as a witness, so
2 it should be Statement of Report rather than Witness
3 Statement. And also there is consistent with
4 Claimants' own translation of those documents.
5 MS. VAZOVA: Can I just respond briefly to
6 that? So, there are competing versions of
7 translations of this document in the record. One is
8 Claimants' translations, the other one is Respondent's
9 translation. We, for purposes of being "O-A"
10 (phonetic), we dispute there is any material
11 differences between the translations, but in order to
12 be fair to the Witness, we have been using and
13 referring solely to Respondent's versions of documents
14 with competing translations where there were any
15 available for his Witness Statements. One of them,
16 for one of them there is no competing version from
17 Respondents. And for the other one we are using
18 Claimants' version because Respondent's version only
19 translated excerpts. Our version translates the full
20 statement.
21 So, I would suggest that if there are any
22 disputes about translations, I don't know that this is
23 really the forum to address those.
24 PRESIDENT SACHS: Well, I think we take note
25 of your comments and leave it there, and we will now
[Page 495]
1 have our break. We resume at 11:00.
2 Mr. [Redacted] , you are still under testimony, so
3 please do not talk to anyone about the case. Thank
4 you very much.
5 THE WITNESS: Yes.
6 (Brief recess.)
7 PRESIDENT SACHS: All right. We can resume.
8 MS. VAZOVA: Do we have co-Arbitrators on
9 yet?
10 PRESIDENT SACHS: Pardon?
11 MS. VAZOVA: I was wondering whether we had
12 Dame Gloster and Professor Mayer yet.
13 (Pause.)
14 PRESIDENT SACHS: We can proceed.
15 MS. VAZOVA: Thank you, Mr. Chairman.
16 BY MS. VAZOVA:
17 Q. Welcome back, Mr. [Redacted] .
18 A. Yes.
19 Q. So, the last question about the SK Merger,
20 the Merger Ratio proposed in the SK Merger was an
21 issue in that case; correct?
22 THE INTERPRETER: Was an issue?
23 MS. VAZOVA: Yes.
24 (Through interpretation.)
25 THE WITNESS: Yes, in the end, it was.
[Page 496]
1 BY MS. VAZOVA:
2 Q. Can we turn to Tab 220 in your binder, sir.
3 And I want to look at Page 7, second
4 paragraph from the top.
5 ARBITRATOR MAYER: Ms. Vazova, we don't see
6 you at all now. You should move a little bit over or
7 move the computer.
8 MS. VAZOVA: How about now?
9 ARBITRATOR MAYER: Thank you. Thank you.
10 MS. VAZOVA: Thank you, sir.
11 THE WITNESS: Yes, I am looking at it.
12 BY MS. VAZOVA:
13 Q. So, you said there: " [Redacted]
14 [Redacted]
15 [Redacted]
16 [Redacted]
17 [Redacted]
18 [Redacted] ." Correct?
19 A. That is correct.
20 Q. Now, one of the main controversies around
21 the Samsung Merger was also the Merger Ratio; correct?
22 A. Yes. This is what I am aware through the
23 media reports and through the Parties.
24 Q. One of the key issues relating for the
25 Samsung Merger was the adequacy of the Merger Ratio;
[Page 497]
1 right, sir?
2 A. Yes, that is how I understood it.
3 Q. In the Samsung Merger, did NPS own the same
4 number of Shares in SC&T and Cheil?
5 A. Well, we didn't deliberate on it
6 specifically, but I understood that the NPS had a
7 significant portion of the Shares in both entities.
8 Q. Isn't it true, sir, that NPS, in fact, held
9 significantly more Shares in SC&T than in Cheil?
10 A. Well, I didn't deliberate on it, so I do not
11 recall the exact ratio between the two, and I don't
12 know about that, sitting here, either.
13 Q. Okay. Would the relative shareholdings of
14 the NPS in SC&T versus Cheil be relevant to the
15 Special Committee if it had the opportunity to
16 deliberate on the Merger?
17 A. It would have been one of the
18 considering--it would have been one of the factors to
19 consider.
20 Q. If, given the Merger Ratio proposed for the
21 Samsung Merger and NPS's relative shareholdings in the
22 two companies, the NPS would have suffered a loss, a
23 short-term loss, as a result of the Merger, would that
24 have been relevant to the Special Committee?
25 A. So, generally, when we are deliberating on
[Page 498]
1 the case, we receive, as meeting materials, the
2 positions of both parties, the Shareholders who are in
3 favor of the Merger and the Shareholders who are
4 opposing the Merger.
5 So, if we were asked to deliberate on the
6 Samsung case, then we would have received documents
7 explaining the positions and the rationale for Elliott
8 and also the document explaining the positions and
9 rationale for Samsung.
10 Q. Okay. That was not quite my question.
11 My question was: If the materials that you
12 were provided reflected that, given the Merger Ratio
13 and the NPS's relative shareholdings in SC&T versus
14 Cheil would result in a loss to the NPS were the
15 Merger to be approved, is that something that the
16 Special Committee would consider in deciding how to
17 exercise the Fund's Voting Rights?
18 A. So, the argument that you just mentioned in
19 your question would be the argument that the opposing
20 party would make, and there would--must have been the
21 materials that deal with the other party's opinions as
22 well.
23 So, regardless of any matters, we would be
24 provided with the positions and the rationale of both
25 parties, and although I am speaking hypothetically, it
[Page 499]
1 is very likely that we would have deliberated almost
2 fully, considering both parties' opinions, not just
3 one party's opinion.
4 So, I would like to say that we wouldn't
5 have listened to only one party's opinion when making
6 a deliberation.
7 Q. So I understand you weren't provided
8 material. I understand you did not deliberate on this
9 issue. My question is: If you were to deliberate on
10 this, would you consider, as part of your
11 decision-making, whether or not the NPS would suffer a
12 loss as a result of the Merger at the proposed ratio?
13 A. That would easily have been a factor to
14 consider. And back then, when Samsung and Elliott
15 went to court for the injunction requests, there were
16 a lot of opinions and rationale from both Parties that
17 came out through the process, and the Court made a
18 quite long decision for that case.
19 And in the decision made by the
20 Court--sorry, the decision made by the Court was sent
21 to me through Samsung's counsel, so I roughly looked
22 through it, and the major issue that was dealt with in
23 that decision was related to the question that you
24 asked me.
25 And, based on my recollection, even though
[Page 500]
1 the applicant, the plaintiff, made some argument, the
2 rationale wasn't accepted by the Court.
3 Q. We'll talk about the District Court's
4 Decision. Before we get to that, though, in addition
5 to whether the NPS would suffer a loss, the Special
6 Committee would also consider the moral and ethical
7 implications of the Merger as proposed; correct?
8 That's what they did with the SK Merger.
9 A. Yes, if we were to deliberate on the Samsung
10 Merger case, it is very likely that the morality issue
11 would have been debated seriously on that matter, as
12 well.
13 Q. So, let's talk about the District Court
14 application you just referenced. I believe the
15 Samsung Merger became the subject of an application
16 from the interim injunction before the Seoul Central
17 District Court; correct?
18 A. Yes, that is how I remember it.
19 Q. And you discussed that in Paragraph 36 of
20 your Witness Statement, so let's turn to that.
21 A. Yes, I have it here.
22 Q. So, in the last sentence of this
23 Paragraph 36 of your Witness Statement, you explain:
24 "In its decision which garnered significant media
25 coverage in the lead-up to the Merger vote, the Seoul
[Page 501]
1 Central District Court found that there were no
2 illegalities in the procedure of the Merger or in the
3 determination of the number of Samsung C&T and Cheil
4 shares that would be exchanged for shares in the
5 merged entity, i.e., (the so-called Merger Ratio)."
6 That's what you say in your paragraph 36;
7 right?
8 A. Yes, it is in line with my recollection.
9 Q. So, as explained in this Paragraph 36 of
10 your Witness Statement, the District Court found there
11 were no illegalities in the determination of the
12 Samsung Merger Ratio; correct?
13 A. That is correct.
14 Q. And the District Court also found, as you
15 also say in Paragraph 36 of your Witness Statement,
16 that there were no illegalities in the procedure for
17 the Merger, either; right?
18 A. Yes, based on my recollection, both the
19 procedure and the content of the case were reviewed
20 by--have been looked at as part of the opinion--as
21 part of the Court's process of reviewing the opinion
22 of the plaintiff, and the Court made a decision
23 accordingly.
24 Q. Did the Court opine on whether the NPS would
25 suffer a loss under the Merger Ratio as proposed?
[Page 502]
1 A. Based on my recollection, even though it is
2 quite vague, I recall there was some mentioning about
3 the judgment on the losses as part of the Court
4 Decision.
5 Q. But ultimately the Court determined that,
6 regardless of the losses that the NPS would be
7 suffered, the Merger Ratio was still legally
8 calculated; correct?
9 A. So, I do not recall the exact wordings in
10 the full decision made by the Court, but based on my
11 recollection, the decision was very detailed. And
12 unless there is an evidence that is presented to the
13 Special Committee members that is going beyond the
14 scope of the Decision made by the Court on a new issue
15 that is not dealt with at the Court, then, since the
16 content and the authority of the Court Decision is
17 quite overwhelming, so it will be quite difficult for
18 me to make a different decision. That was the
19 impression that I got as--personally as attorney.
20 Q. Now in the--
21 A. --with legal background.
22 Q. --in the SK Merger, you didn't think there
23 was illegality in the Merger procedure; right, sir?
24 A. I do not have any recollection of having
25 discussed the procedural issues.
[Page 503]
1 Q. Let's look at Paragraph 17 of your Witness
2 Statement, then.
3 A. Yes.
4 Q. So, you say in Paragraph 17 of your Witness
5 Statement, in relation to the SK Merger, that it was
6 not the problem of illegality that caused concern but
7 more of an ethical one; right? That's what you
8 testified?
9 A. Yes, that's how we viewed it.
10 Q. And both you and the rest of the Special
11 Committee voted against the SK Merger, even though
12 there was nothing illegal in how that Merger was being
13 proposed?
14 A. Yes.
15 Q. So, you alluded to that earlier. You allude
16 earlier to being contacted by counsel for Samsung, and
17 I want to take you to Paragraph 23 of your Witness
18 Statement.
19 A. Yes, I am looking at it.
20 Q. So, you explain in Paragraph 23 of your
21 Witness Statement that you were contacted by counsel
22 for Elliott, who suggested a meeting, and you told him
23 that the meeting would be inappropriate, but you'd
24 review any materials he may want to send you; correct?
25 A. That is correct.
[Page 504]
1 Q. It wasn't just Elliott who tried to meet
2 with you, though; right? Samsung tried to meet with
3 you, as well?
4 A. Yes. The counsel for Elliott is two years
5 senior than me. We're from the same school. And
6 counsel for Samsung is my--in the same school--was in
7 the same school with me in the same year, so both of
8 them were the attorneys that I personally know. They
9 asked to meet me in person, but I rejected both
10 requests and said to both Parties that if they send me
11 the materials, then I will fully review them, and they
12 sent me the documents.
13 Q. And you believed that Samsung's
14 representatives tried to meet with other members of
15 the Special Committee, as well; right?
16 A. Based on my recollection, both sides were
17 making efforts to communicate with the members with
18 their best effort, and I think, depending on the
19 decisions of the individuals, some individuals may
20 have met with the representatives and some may have
21 not.
22 Q. Okay. I just want to be clear because you
23 focus on your Witness Statement--in your Witness
24 Statement in a request to meet from Elliott. It
25 wasn't just Elliott who was trying to meet with you.
[Page 505]
1 It was also Samsung; correct?
2 A. That is correct, and I do recall having said
3 that Samsung tried to meet me at some part.
4 Q. And you also believed that Samsung tried to
5 meet with rep--with other members of the Special
6 Committee, as well; right?
7 A. Well, Samsung representative tried to meet
8 me, so I would expect that they would have tried to
9 meet with the other members of the Committee.
10 Q. Understood.
11 Let's turn to Paragraph 30 of your Witness
12 Statement.
13 A. Yes.
14 Q. And there, you discuss a report that you
15 were shown by the Prosecutor when you were
16 interviewed. The report was prepared by the Ministry
17 of Health and Welfare, forecasting how different
18 members of the Special Committee would vote; is that
19 accurate?
20 A. I think it is accurate.
21 Q. So, let's turn to your statement to the
22 Prosecutor. That's Exhibit C-220, Tab 220 in your
23 binder.
24 And, in your version, Mr. [Redacted] , we're going
25 to be looking at Page 17. For those following along
[Page 506]
1 the English version, we're going to be on Page 19.
2 A. Yes, I am looking at it.
3 Q. So, the Report that you were asked about,
4 that's what was excerpted on Page 18, I
5 suppose--sorry, Page 16 of your version of the
6 document?
7 A. Yes, I'm looking at it.
8 Q. All right. And as we see on Page 19,
9 Page 17 for you, Mr. [Redacted] --when you were questioned
10 by the Special Prosecutor, you
11 said that: " [Redacted]
12 [Redacted]
13 [Redacted] ."
14 That's what you said; right?
15 A. So, the Prosecutor [Redacted]
16 , saying that [Redacted]
17 [Redacted]
18 [Redacted] , and
19 [Redacted] . And the premise of the question asked was
20 that [Redacted]
21 [Redacted] . And I answered,
22 [Redacted] , and this
23 opinion is around that particular premise.
24 Q. You also told the Special Prosecutor that
25 [Redacted]
[Page 507]
1 [Redacted]
2 [Redacted] ; right, Mr. [Redacted] ?
3 A. Yes, and that was a point made on the
4 assumption that the premise made by the Prosecutor,
5 the hypothetical premise, was correct, so yes.
6 MR. HAN: Mr. President, while we are on the
7 page, I'm not trying to interrupt the cross, but it's
8 already on the page, we want to correct one
9 interpretation issue.
10 So, Mr. [Redacted] , if you look at time stamp of
11 Transcript 13:30:52, and here I quote that you
12 testified in Korean: I was questioned--I'm sorry, I
13 was questioned as--I was--was the question asked was
14 if there the Government tried to analyze and contact,
15 but I recall that you said in Korean "shiljero
16 jungbooga bunsukhago jupchokhatdamyun."
17 So, he--you said that actually governments
18 analyzed and contacted, not they tried to analyze and
19 contact.
20 THE WITNESS: So, that is not something I
21 could know. The Prosecutor suggested the facts that
22 he or she is supposed to know, and said that it seems
23 to be the case that the Government analyzed and
24 contacted the members. And what I said here was, [Redacted]
25 [Redacted]
[Page 508]
1 [Redacted] .
2 So, my answer to this question was made
3 based on a hypothetical situation where what the
4 Prosecutor suggested was right. And this is not the
5 fact that I experienced.
6 MS. VAZOVA: Mr. Chairman, if I may, I think
7 a lot of these interpretation issues have veered into
8 redirect examination territory. I believe I've been
9 patient, even if I say so myself, but I would
10 respectfully submit that questions that seek to
11 clarify, or to give the Witness an opportunity to
12 clarify his answers, should really be in reserved for
13 redirect as opposed to being casted interpretation
14 questions.
15 PRESIDENT SACHS: Yeah, I would agree with
16 that. I mean, it's better the flow of the
17 cross-examination, if you intervene later.
18 MR. HAN: Will do so. Thank you,
19 Mr. President.
20 BY MS. VAZOVA:
21 Q. Mr. [Redacted] , let's move on to Page 19 of the
22 document in front of you. It's going to be Page 21
23 for those of us looking at the English version.
24 A. Yes, I'm looking at it.
25 Q. So, you told the Special Prosecutor,
[Page 509]
1 Mr. [Redacted] , as said here on Page 19/21 of this document,
2 that [Redacted]
3 [Redacted] ; right?
4 A. That is right.
5 Q. But [Redacted]
6 [Redacted]
7 [Redacted]
8 [Redacted] ?
9 A. Yes, that is how it is written here.
10 Q. And [Redacted]
11 [Redacted]
12 [Redacted]
13 [Redacted] ; right?
14 A. Yes. I have a thought that the Government
15 should remain neutral and perform its supervision and
16 oversight in a lawful manner.
17 Q. And [Redacted]
18 [Redacted]
19 [Redacted] ; right? That's what you said
20 here?
21 A. Yeah, I agree that all the employees at the
22 National Pension Fund and the members of the Special
23 Committee should work for the benefit of the National
24 Pension Service and should prevent the losses to the
25 National Pension Service.
[Page 510]
1 Q. [Redacted] ;
2 right, Mr. [Redacted] ?
3 A. Well, I was told that the Ministry--that
4 this--and if this--that if that is the fact, then I
5 understood it to be very shocking. The Government
6 making such a document and tried to adjust the
7 behaviors of the members, if that is the case, that is
8 fact, then it would be a serious problem, and I was
9 shocked.
10 Q. Now, Mr. [Redacted] , if the Samsung Merger went
11 against the interests of the National Pension Fund or
12 decreased Shareholder value, the Special Committee was
13 supposed to reject the Merger; correct?
14 A. So, if there is a consensus on the losses
15 and the gains, then, of course, I think that the
16 losses will need to be prevented and the gains--I
17 would say "yes" to the gains. But I--as I understood,
18 there was fierce discussions around the loss part.
19 Q. If the Samsung Merger were ex--was expected
20 to damage Shareholder value, the Special Committee was
21 supposed to reject it; correct?
22 A. If the loss is proven to be--proven to an
23 extent that would be agreed upon by the majority of
24 the members of the Special Committee, then it would be
25 the right decision to make.
[Page 511]
1 Q. Now, Mr. [Redacted] , you believe the Samsung Merger
2 should have been referred to the Special Committee;
3 right?
4 A. Yes. From the point when I heard that the
5 decision was not referred to the Special Committee and
6 when the meeting, interim meeting, was held to have
7 discussions on our positions, and until now most of
8 the members of the Special Committee thought--thought
9 that the matter should have been referred to the
10 Special Committee, and I also maintain that position,
11 too.
12 Q. In fact, as you told the Special Prosecutor,
13 Mr. [Redacted] ,
14 [Redacted] ;
15 right?
16 A. Yes, that was a position made through the
17 interim meeting that the Special Committee held on the
18 decision not to refer the case to the Special
19 Committee. We reached a collective consensus that the
20 matter should have been referred to the Special
21 Committee and we created a press release, and that was
22 published to media outlets.
23 Q. It is also your view, isn't it, Mr. [Redacted] ,
24 that [Redacted]
25 [Redacted]
[Page 512]
1 [Redacted] ?
2 A. Basically, yes, but then there was a very
3 fierce debate in putting those into words, and let me
4 continue. At first, most of the Committee members and
5 myself had discussed expressions like "a breach" of
6 the Regulations.
7 And then, the--Mr. [Redacted] , the official from
8 the Ministry of Health and Welfare who attended the
9 meeting, said that if you definitively say that it was
10 a breach of Regulations then it is, in fact, not upon
11 the Special Committee members to decide on whether
12 that was a breach of Regulations and it is up to the
13 Court to decide, and plus, there could be problems
14 to--caused to the public officials as well. So, he
15 asked us not to use the expression "the breach of
16 regulations." And listening to what he said, I
17 thought--I mean, I was thinking of using the word
18 "breach of regulations" out of my habit as attorney,
19 but I realized that this is, in fact, the legal
20 phrase, and it would be inappropriate for the Special
21 Committee members to judge whether this is a breach of
22 the Regulation or not.
23 So, in the end, we were able to phrase the
24 position of the members of the Special Committee in a
25 non-legal language, such as not reasonable, not
[Page 513]
1 appropriate, or regretful. And the consensus was
2 reached that the Judicial Branch will need to decide
3 on whether that was a violation or not, so that is how
4 we came to the final wording in the Report.
5 So, in terms of the wording, it is said that
6 the request may be made to the Special Committee to
7 deliberate on the matter. So, that is up to the
8 discretion. So, there were two different opinions
9 around what kind of discretion this is. Is it a fully
10 free discretion, or is it a discretion that is still
11 bound by the reasonable boundaries? And the Special
12 Committee members thought that it was the latter,
13 which is bound--the discretion that is bound by the
14 reasonable boundaries. And the Ministry of Health and
15 Welfare and the National Pension Service felt it is
16 the former, which is a completely free discretion.
17 And there were some differences between the
18 two sides; and, in the end, the Special Committee
19 agreed to a wording that is used in the Final Report.
20 And with the consideration that this is the--this is a
21 discretion that is describing a discretion that is
22 within a reasonable boundary.
23 Q. Well, thank you for this very detailed
24 answer. That was not my question at all.
25 I asked whether it was your view, Mr. [Redacted] ,
[Page 514]
1 [Redacted]
2 [Redacted]
3 [Redacted]
4 [Redacted] .
5 A. So, I am a little cautious with the word
6 "--sorry, what was it? " [Redacted] " that
7 was used in the question because the wording was dealt
8 with quite seriously. It--that most of the members of
9 the Special Committee thought that the matter should
10 have been referred to the Special Committee; but,
11 after a certain amount of discussion, since the
12 wording is pointing to discretion, it is
13 understandable that the NPS thought that they had the
14 discretion, and it is possible that they thought that
15 way. I mean, you can find the expression that we were
16 able to agree to a certain degree on that thought, and
17 that it wasn't just clear cut without any room for
18 debate, so I wouldn't--that is why I want to be
19 cautious with the word " [Redacted] ."
20 Q. Okay. Let's turn--
21 PRESIDENT SACHS: May I interject.
22 Mr. [Redacted] , this is precisely the word you used
23 in the interview with the Prosecutor on Page 15. Is
24 that a misquote of--how do you explain this? At the
25 bottom of Page 15.
[Page 515]
1 THE INTERPRETER: He's asking for the page
2 in Korean.
3 MS. VAZOVA: It's Page 14 of the Korean
4 version.
5 Last paragraph.
6 PRESIDENT SACHS: Maybe for the Transcript,
7 we could read it, if the Interpreter could please read
8 the passage in English to the record. Starting with
9 " [Redacted] ."
10 THE INTERPRETER: " [Redacted]
11 [Redacted]
12 [Redacted]
13 [Redacted]
14 [Redacted]
15 [Redacted]
16 [Redacted]
17 [Redacted] ."
18 THE WITNESS: Well, I think there is a
19 slight misinterpretation in the document. What I said
20 in Korean is interp--translated as " [Redacted] " here,
21 but based on my understanding of English, it might not
22 be the exact--exactly accurate translation. I think
23 it should be "mandatorily" instead, so it's more about
24 explaining that it should be done, not "it is clear."
25 PRESIDENT SACHS: Thank you. So,
[Page 516]
1 "mandatorily." All right.
2 Now, is that still your position?
3 THE WITNESS: Yes, that is my current
4 position, and I find it hard to agree with the
5 translation " [Redacted] ," and I would hope to change
6 it to "mandatorily" instead.
7 PRESIDENT SACHS: Okay.
8 BY MS. VAZOVA:
9 Q. Can you turn to Tab 214 in the binder in
10 front of you, Mr. [Redacted] .
11 A. Yes, I'm looking at it.
12 Q. So, it's an e-mail chain, and the e-mail I
13 want to ask about is the second one from the top-down.
14 ARBITRATOR MAYER: Can you tell us which
15 exhibit it is, please.
16 MS. VAZOVA: Certainly. It's C-214.
17 ARBITRATOR MAYER: Thank you.
18 THE WITNESS: Are we looking at the e-mail
19 on July 10th?
20 BY MS. VAZOVA:
21 Q. Yes, sir.
22 A. Yes, I am looking at it.
23 Q. So, this is an e-mail from [Redacted] ,
24 chairperson of the Expert Committee on the Exercise of
25 Voting Rights; right?
[Page 517]
1 A. Correct.
2 Q. And the e-mail was addressed to the Joint
3 Administrative Secretaries of the Expert Committee,
4 that's [Redacted] and [Redacted] ; right?
5 A. Correct.
6 Q. And then it copies the members of the Expert
7 Committee including yourself; correct?
8 A. Correct.
9 Q. And then, if you were to turn to the second
10 paragraph in Chairman [Redacted] 's e-mail?
11 A. Yes.
12 Q. It reads: " [Redacted]
13 [Redacted]
14 [Redacted]
15 [Redacted]
16 [Redacted]
17 [Redacted] ," and I'll pause
18 there just for the transmitter because it's a long
19 paragraph.
20 A. Yes, I am looking at it, and I agree with
21 the content.
22 Q. And Chairman [Redacted] goes to say: " [Redacted]
23 [Redacted]
24 [Redacted]
25 [Redacted]
[Page 518]
[Redacted]." Right? That's what it says?
A. Yes, that is how it reads. And plus, Chairman [Redacted] asked me: Who is the only person with the legal background in the Committee to draft this letter? So I drafted it. So, I am well-aware with the content.
Q. You're just aware of the content. You also agree with it, Mr. [Redacted]?
A. Yes, I do agree.
Q. Then you also agree that, in consideration of these past cases, as this paragraph we just looked at continued to say: "[Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted]."
You agree with that as well; right?
A. I agree with it primarily. And, after the interim meeting where fierce discussion and debate happened, there was some modification to the expression, and the final wording in the final Press Release is the final position of the collective members of the Committee.
And this expression is representation of
[Page 519]
what I thought at the time of writing the e-mail, and it is basically the same even after that as well.
But the exact wordings that were used in the end could be looked at from the "press-release."
Q. Now, Mr. [Redacted], when we were discussing the Press Release earlier, you mentioned that there were two schools of thought, so to speak, on whether there was discretion in whether to refer the Samsung Merger vote to the Experts Voting Committee. Do I recall that correctly?
A. Yes. And the most accurate expression would be the wording shown in the Press Release because this is a press--and the Press Release is quoted in the statement to the Prosecutor, and the document that is quoted in their Press Release is as a result of one or two hours of tug-of-war, so I would say that the expression written there would be the most accurate one.
And about the understanding of how much of the discretion that the National Pension Service had, the thoughts on that is, in fact, expressed in the Page 13 of the statement to the Special Prosecutor.
So, that is Tab 220, and the Korean version Page 13.
So, on Page 13 of the Tab 220, "Because of
[Page 520]
the ambiguity in the relevant regulations and instructions, the Expert Committee sympathized with considerable difficulties that the Fund Management Office must have confronted in deciding whether to refer the matter to the Expert Committee to make a decision on this case". That was our thought on the discretion part, and the opinion from the Special Committee is as follows: "However, the Expert Committee regretfully believes that the motion should have been referred for its deliberation in view of past precedents and purpose of the regulation". And we also added a request further down the line, "We request the Fund Management Office to further review and amend the relevant provision to minimize potential disputes in the future."
Q. It was your view, wasn't it, sir, that it was an abuse of discretion for the Investment Committee to fail to refer the Samsung merger to the Special Committee?
A. Yes. That is what I said back then, and inside--internally as an attorney, I thought so, but at the time I decided not to use the legal terms in preparing the Press Release to accurately express the thoughts of the Committee members, and instead use the non-legal terms to represent the thoughts of the
[Page 521]
Special Committee.
So, the thoughts of the Special Committee members are expressed in non-legal terms in the Press Release.
Q. Well, let's talk about this meeting where the words of the Press Release were negotiated.
I believe you described that in Paragraphs 38 to 42 of your Witness Statement, if I'm not mistaken.
A. Yes, I'm looking at it.
Q. So, one of the gentlemen who attended the meeting--I believe you mentioned his name earlier--was Director [Redacted] from the Ministry of Health and Welfare; correct?
A. That is correct.
Q. And it was Director [Redacted] who insisted that the wording of the Press Release you just showed us be changed from "unlawful" to "regrettable"; correct?
A. Well, he didn't insist on a certain phrase like "regretfully," but what he requested was not to use the word "violation," and he said that there are two reasons for his worries of using the word "violation": Number 1, the public officials could get into trouble; and, Number 2, that is up to the Courts to decide.
[Page 522]
Q. You were so frustrated with Director [Redacted]'s behavior at the meeting, Mr. [Redacted], that you requested his removal from the meeting; right?
A. So, in fact, Mr. [Redacted]'s stance I would say or the behavior changed over time from the start to the end, and from the earlier stage to the middle of the meeting, he was very adamant about not even holding the meeting, interim meeting, and the Special Committee should not be making a deliberation at all. And in such arguments made by Mr. [Redacted] was denying the very existence of this Special Committee and the authority of the Special Committee.
And I thought that Mr. [Redacted], who doesn't even have a vote in the Special Committee, was undermining the authority of the Committee, and just continued on with the arguments that are nonsensical. So--and was preventing the overall flow of the meeting.
So, at the mid-point of the interim meeting--at the mid-point of the meeting that we held up--up until the mid-point of the meeting that we held, I was rebutting his argument quite fiercely. And then even after a certain amount of discussions that were based on logic, from my side, he didn't listen, so I even suggested the Chairman to vote on
[Page 523]
whether to remove Mr. [Redacted] from the meeting or not.
And I said that his attitude changed over time. At the earlier part of the meeting, he was very insistent and adamant about his appeals, but then at a certain point in the middle of the meeting, he realized that he will not be able to prevent the decision to be made, so he changed his attitude to try to change the wording.
So, we were rebutting Mr. [Redacted], who tried to stop the decision from being made at the earlier part of the meeting, but on the later part of the meeting when we were discussing about the wording, he pointed out that the legal term should not be used, and that made me realize that, "Oh, I should be thinking of this as a Special Committee member, but then I was thinking of this as a legal professional", so I accepted his point about using the legal terms to be inappropriate in the Press Release and accepted his opinion on that matter at the later part of the meeting.
And that, I would say, is contribution that he made to the meeting at the end about the wording that is used in the Press Release.
Q. Understood.
And as you say in Paragraph 42 of your
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Witness Statement, even though you requested Director [Redacted]'s removal from the meeting, on reflection, you do not think that his participation in the Special Committee Meeting went beyond the scope of the Administrative Secretaries' duties; is that right?
A. Yes, that is right.
Q. When did you have an opportunity to reflect upon that, Mr. [Redacted]?
A. Mr. [Redacted] would attend the Special Committee Meetings always, and he would deliver the opinions of the Ministry of Health and Welfare at the meetings so that these Committee members could consider them, so his participation itself is within the scope and responsibilities of the Secretary, I think.
Q. Did you reach this conclusion before or after you were asked to testify in this Arbitration?
A. My thought didn't change. If you look at that incident only where I thought that Mr. [Redacted] should be removed from the meeting, then it could be read as him not being allowed or not being able to participate in the meeting. But his participation is not a problem, and he--but his attempts to prevent the decision from being made is unreasonable, but his--another opinion of changing the legal term to a non-legal term was acceptable.
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I mean, only pointing to a single incident that happened in the course of two to three hours of fierce debate would be misleading and that required clarification, that is why it is written here but my position didn't change.
Q. Last couple of questions. And for that, if you can turn to Tab 165 in your binder, and that's going to be Exhibit C-165. And, for the record, that's the Statement Report of Director [Redacted] to the Special Prosecutor. I just want to take a look, Mr. [Redacted], about what Director [Redacted] himself said about his participation in the meeting. And we're going to be looking at Page 23.
A. Yes, I am looking at that.
Q. So, when asked about the meeting, Director [Redacted] responded as follows: "[Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted] [Redacted]."
[Page 526]
Do you see that?
A. Yes, I am looking at it.
Q. Do you still think that, Mr. [Redacted], there was nothing unusual about Director [Redacted]'s participation in the Special Committee Meeting?
A. To be--to precisely put it, his participation in the meeting is not a problem. His attempt to prevent the decision in the meeting is not acceptable. But his opinion around the legal terms being used being inappropriate is acceptable.
Mr. [Redacted] did all he could do, but the unjust requests would not be accepted by the Special Committee members, and the parts that are reasonable are accepted.
And what I want to highlight here is that it was not a meeting that was controlled by Mr. [Redacted]. Anyone who is giving a reasonable argument would be heard, and then the decision would be made based on the reasonable arguments made, and the process was followed.
MS. VAZOVA: Thank you, sir. I have no further questions.
PRESIDENT SACHS: Thank you.
Will there be questions in redirect?
MR. HAN: Yes, Mr. President.
[Page 527]
PRESIDENT SACHS: So please proceed, Mr. Han.
MR. HAN: Just one point in redirect. If I may, I'm going to use Korean to help the interpretation.
PRESIDENT SACHS: Yes.
MR. HAN: Thank you.
REDIRECT EXAMINATION
BY MR. HAN:
Q. The counsel for the Claimant asked you questions around the operation guidelines, and I would like to ask you some questions regarding that.
MR. HAN: Operator, R-144, please. Article 17, please.
THE INTERPRETER: Which tab in the binder, please? Is it 144 in the binder as well?
MS. VAZOVA: It is.
MR. HAN: Yes.
THE WITNESS: Yes, I'm looking at it.
BY MR. HAN:
Q. Witness, you testified that since Article 17 is related to the Special Committee, so you were provided with Article 17, and you reviewed Article 17. And are you familiar with Article 17.5?
A. Yes. They are related to the exercise of
[Page 528]
Voting Rights, so Article 17-4--17.4 and 17.5 would be the provisions that I looked at every time we had a meeting.
Q. Could you explain to the Tribunal how you and the other members of the Special Committee understood the Article 17.5?
A. If you look at Article 17.5, in principle, the NPS would exercise the Voting Rights. So, Article--
MS. VAZOVA: Mr. Chairman, I'm so sorry to interrupt. I do have to object here. If we look at Transcript from this morning, 9:00 at 12, I asked the Witness the questions, "so the only parts of Exhibit R-144 that you have ever reviewed were Article 5.5 and 17.4, is that your testimony?" The Witness responded, "that is correct."
I'm not familiar with the rest of the provisions. He disclaimed any knowledge of Article 17.5. I don't ask any questions about Article 17.5. I don't think this is the proper subject matter for a redirect examination.
PRESIDENT SACHS: Let me put it differently. I mean, the Tribunal is in a position to read those provisions, so I doubt whether it's really helpful to go along this line of questions.
[Page 529]
MR. HAN: Yes, Mr. President.
So, Article 17.5 provision, so whether the Witness and other members of the Expert Committee had the same understanding of the Article 75 which provides on its face was the question I was put to the Witness.
PRESIDENT SACHS: Yes, but you had the observation coming from the Claimants' counsel that that was not addressed in cross-examination, and that the Witness also--I don't recall that precisely, but it was that he doesn't--didn't remember the content of the other provisions.
MR. HAN: So, we submit that, by implying he's aware of Article 17.5 as well, so I think Mr. [Redacted] now testifies that he is also aware of Article 17.5, not only 17.4.
MS. VAZOVA: We're happy to put the Transcript on the screen. The Witness's testimony was very clear.
PRESIDENT SACHS: I think you should move to your next question.
MR. HAN: Okay. Will do.
(Witness speaking without interpretation.)
PRESIDENT SACHS: Mr. [Redacted], so we were discussing this, and I said we should move to the next
[Page 530]
question, so I'm sorry, but since it's now--please translate what the Witness said.
THE INTERPRETER: Yes.
So, he made a point that this testimony is not a test of his memory, and when he was directed to look at Article 17 in the morning, he was able to see Article 17.4 that has relevance to the Special Committee. But what my intention was anything that is related--any provision that is related to the Special Committee is presented to the Special Committee. And now that I look at Article 17.5, it is also relevant.
PRESIDENT SACHS: Yes. We've discussed that Article at various instances, and I would now suggest that you move to the next question.
MR. HAN: Yes, thank you, Mr. President.
BY MR. HAN:
Q. Mr. [Redacted], the counsel for the Claimant asked you about the decision made by the Seoul Central District Court on the injunction request, and the question had--the question centered around whether the NPS suffered losses due to the Merger, and I would like to ask you questions within that regard.
MR. HAN: Operator, R-177, please.
It is not on the tab. So the bundle should be pulled up. Page 14, please.
[Page 531]
Can we also see the Korean version, too?
THE INTERPRETER: Was that a request to the operator?
MR. HAN: Yes.
Operator, can you put the Korean version side by side.
FTI TECHNICIAN: Do you have a page for the Korean version?
MR. HAN: Korean version is Page 14, but in the internal Page 14, actually the PDF page is also Page 14 in Korean version.
THE WITNESS: Yes, I'm looking at the Korean version.
BY MR. HAN:
Q. If you look at the middle part, it says whether the purpose of the Merger was unreasonable. Are you looking at it?
A. I'm looking at it.
Q. So, in the decision it says it is difficult to conclude that based on the records submitted, the Merger only inflicted damages to the Respondent Company shareholders and provided profit to the I and its shareholders.
Were you aware of this content in the decision?
[Page 532]
A. I didn't have a chance to review it this thoroughly.
Q. Let me move on to the next question.
MR. HAN: R-242, please. Could you put them side by side, please. Page 44.
BY MR. HAN:
Q. Witness, you testified that the matter not being referred to the Special Committee, whether it is a violation of the Regulation or not is up to the Court to decide and not up to the Special Committee to decide. Did you testify so?
A. Basically, the decision not to use the legal terms was based on my understanding that it is out of the scope of Special Committee's authority to make a legal judgment. So, in the end, we decided not to use the legal term there.
Q. Are you aware that there was a Court Decision on this matter?
A. I haven't heard of it.
Q. If you look at the decision on the screen. And here it says, according to the Guidelines set for the Exercise of Voting Rights of NPS, in principle, Voting Rights of Shares are to be considered and decided by the Investment Committee of the Investment Management Division. And if there is
[Page 533]
an Agenda that is too difficult for the Investment Management Division to decide, it can exercise its discretion to request the Agenda to be decided by the Special Committee.
Can you see that?
A. This is the first time that I'm seeing this, but I can see that.
(Witness speaking in Korean without interpretation.)
PRESIDENT SACHS: Sorry, we have to hear the translation first.
BY MR. HAN:
Q. And on the bottom side of the same paragraph, it reads--
PRESIDENT SACHS: Mr. Han, if I may intervene, you're putting decisions to the Witness that he has not seen, so that is not very helpful to the Tribunal.
MR. HAN: I will move on, Mr. President.
PRESIDENT SACHS: Please do so.
BY MR. HAN:
Q. Let us look at the Witness Statement that you submitted?
MR. HAN: It's RWS-1, Page 4.
THE INTERPRETER: Which paragraph are we
[Page 534]
looking at?
MR. HAN: Paragraph 17.
THE WITNESS: Yes, I'm looking at it.
BY MR. HAN:
Q. And you testified that it was more of a problem of ethical issue as the Shareholders of the Company whose Shares were held more by the owner family of SK Group would reap unfair benefits.
A. Yes.
Q. And you were asked about the retirement of the treasury stock in the morning, and you gave your testimony in length.
Could you please explain the ethical problem that you're mentioning here. Is that a problem related to the Merger, the unfair Merger Ratio or the problem related to the timing of the retirement of the treasury stocks?
A. Well, those two are related. How are they related? If the allocation happens in an ethical and fair way after the retirement of the treasury stocks, or if the allocation is made earlier than that. I mean, the decision between the two would, in the end, affect the Merger Ratio.
So, the ethical problem of the timing of the retirement of treasury stocks would, in the end,
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affect the Merger Ratio, so we viewed it as a linked issue.
MR. HAN: Mr. President, Respondent has no further questions.
PRESIDENT SACHS: Very good.
I do have a question, Mr. [Redacted].
QUESTIONS FROM THE TRIBUNAL
PRESIDENT SACHS: You were shown the Decision R-177 of July 1, 2015 by the Seoul Central District Court which stated that the Merger Ratio was--ought to be criticized, and you said you didn't--you didn't know it. I don't know what you exactly said--you didn't review it. You didn't review it.
But you mention it in your Witness Statement on Page 36, and even in a footnote, and later on in Paragraph 37 you even say that this was the main reason why you thought you could not have voted against the Merger because that would have been difficult to concile with that Decision. So, how do I have to understand that?
THE WITNESS: So, I had made an overall review of the decision by the Court on the injunction request, and I do not recall having reviewed the detailed parts related to the losses, means that I
[Page 536]
didn't pay attention specifically to that.
So, I would like to say that I made a review of the document in a general overall sense; and, based on my overall review of the document, I prepared my Witness Statement here.
And when I was asked a question about the specifics of the document, I didn't look into the detail that is the intent of my answer, so these two testimonies do not contradict each other, so I would like to summarize my point as such: Did I make a general review of the decision? Yes. Did I make a specific review of the detailed parts of the decision? No. And if we were asked to deliberate on the case, then it is very likely that I would have reviewed in fuller detail.
PRESIDENT SACHS: Yes, because you said that you even wanted to present that decision to the Special Committee members in Paragraph 37. You said that?
THE WITNESS: Yes, I said is that.
MR. HAN: Mr. President, with respect, I'm wondering if you could refer to the court decision that I took the Witness to and to which he was not aware of.
PRESIDENT SACHS: R-177?
[Page 537]
MR. HAN: No, it was R-242, another court decision that I took the Witness to. So, the court decision that he said that he is not aware of was not R-177.
PRESIDENT SACHS: I have a different recollection, but the Transcript would show this.
Do my co-Arbitrators have questions to the Witness?
ARBITRATOR GLOSTER: I don't. Thank you.
ARBITRATOR MAYER: I don't either, thank you.
PRESIDENT SACHS: So, Mr. [Redacted], thank you very much, your testimony has come to an end. And I also thank again the Interpreter. Today it was a little bit more difficult, but this is probably due to the fact that we are lawyers and sometimes we need to be as precise as possible.
What I would suggest is I would like to talk to my co-colleagues in our breakout room, so please stay in the room, it won't take long, and I think I will get back within 10 minutes, okay? So Operator, can you please switch us to the breakout room.
(Tribunal conferring outside the room.)
PRESIDENT SACHS: So, we have two organizational matters that we would like to discuss
[Page 538]
with you. The first matter concerns the questions raised by Professor Mayer. We would suggest that we hear you on these questions tomorrow, at the end of tomorrow's witness hearing, expert witness hearing.
And the second issue concerns Saturday. So, from the Tribunal's perspective, we're hesitant. We think that you have provided us with very thoughtful and interesting opening, both verbal and in documents, so we heard, of course, some evidence, but we want to flag that we would prefer to have Post-Hearing Briefs, but we want to hear you first because if you think that we should hear you on Saturday in a certain format, then we will discuss this.
So I turn to you. We are here. We will be here, so we're available, but we also wanted to let you know that we will certainly request you to provide us with Post-Hearing Submissions and possibly--possibly--followed by a one-day oral argument subsequent to the Post-Hearing Briefs that could be held virtually in order to reduce costs. But these are our ideas that we wanted to flag.
Do you want to take a short break before--yes? Okay. So, let's say, what? 10 minutes? Okay.
(Witness steps down.)
[Page 539]
(Recess.)
PROCEDURAL DISCUSSION
PRESIDENT SACHS: So, before we get to that, let me say that I was told by my assistant that I was probably in error when I referred my remarks to R-177, so Mr. Han--I don't see him presently--I just want to put on the record that I will review the Transcript as well.
So, this being said, can we hear you on the Saturday issue.
MS. LAMB: Thank you. Thank you, sir. Of course, we're in your very good hands on that. As you know, it was our strong preference to be able to close the case, if you will, while we're all in the moment of the case, but we hear you.
Our respectful submission would be that you approach the issue of Post-Hearing Briefs and any post-hearing oral reflections on those Briefs with both principles of efficiency and practicality in mind.
Let me elaborate just a little on that.
As to efficiency, now again is the moment where we are all in full familiarity with the case. I would strongly urge you to set a rather tight timetable in terms of when we will be able to file
[Page 540]
those Briefs. I would strongly urge you to ask both Claimant and Respondent file those Briefs at the same time so as to draw a line under the proceedings, and I would also strongly urge you to set an approximate date for an Oral Hearing, if indeed having read those Briefs you consider you wish to hear from us.
Again, and I would strongly urge you to indicate to the Parties any issues on which you wish us to place particular focus so that we don't end up with voluminous post-hearing material, much of which are just often repetitive of materials that have already been submitted.
The second principle is rather particular to our team, and it's an issue of practicality. It may not have escaped your notice, Professor Sachs, that a number of members of this team are due to be on maternity leave in the not-too-distant future, and we will be grateful to have the opportunity for all members of the team to participate in whatever post-hearing process unfolds from now on.
So, that's it from our side. Thank you.
ARBITRATOR GLOSTER: Ms. Lamb, can I just make one point. So far as Post-Hearing Briefs are concerned, what, speaking for myself, I'm particularly concerned to have is both sides' submissions as to how
[Page 541]
the evidence which we have heard or will hear during this week impacts on both sides' arguments. I am certainly not looking for a repeat or repetition of the lengthy memorials which we have already had and the lengthy openings which we've had. What I would like--rather than having it in the Transcript, I would rather have it in a post-hearing brief--is, as I'd said, your respective submissions as to how we are assisted either way by the evidence which we have heard.
ARBITRATOR MAYER: I had the same understanding of what kind of Post-Hearing Briefs we were expecting. I guess that's also the view of the President.
PRESIDENT SACHS: Yes, it is. But before we elaborate on this, we will hear the Respondent.
MR. FRIEDLAND: Yes. We agree with the Tribunal's instinct, that having had such extensive Opening Arguments, it would not be necessary or efficient to have a Closing Argument this weekend.
And we largely agree with the principles stated by our counterpart, Ms. Lamb, as to the Post-Hearing Briefs. We would suggest that counsel discuss between us the appropriate deadlines and a page limit. And we certainly also agree with the
[Page 542]
principle stated by the Tribunal that the purpose of the Post-Hearing Brief is to address what's new from the Hearing, which could include, by the way, Tribunal questions raised during the Hearing, not just evidence, so there we go.
Did I cover everything, my colleagues?
Okay, that's it.
PRESIDENT SACHS: So, yes. Well, fine, there seems to be common ground, and as far as the questions are concerned, the Tribunal may put, yes, we will consider this. It is quite likely.
In addition, of course, to your general comments as to the results of the taking of the evidence, so--well, this will not be the first case in which the Tribunal will send you questions to deal with in Post-Hearing Briefs, so you know how to deal with that.
Yes, we would invite you, therefore, to confer with each other as far as the deadlines are concerned and the page limit; and also possible dates, then, for Closing Argument respecting of the deadlines on your team's side.
MR. FRIEDLAND: One question: Was there an assumption or a direction there be two Post-Hearing Briefs or a single?
[Page 543]
PRESIDENT SACHS: You didn't mention it, we didn't mention it, so we leave this to you.
MR. FRIEDLAND: Okay.
PRESIDENT SACHS: If we have a closing hearing, one round could be sufficient.
MS. LAMB: I think implicitly I did because I suggested that we both file our Briefs at the same time, and that will draw a line under it.
PRESIDENT SACHS: Simultaneous Briefs?
MR. FRIEDLAND: Simultaneous is okay, but the question is whether there were two rounds of simultaneous, so maybe we could discuss that, and if there is disagreement, we could get back to the Tribunal.
PRESIDENT SACHS: Right.
MS. LAMB: Sir, just one further thought, then, with regard to Professor Mayer's questions, you made the suggestion that we come back to that tomorrow at the ends of what will again be another very long day. I wonder whether, in fact, we just wrap those into the Post-Hearing Briefs. One of the Professor's questions was actually directed to both Parties. He had a hypothesis and asked whether, in that hypothesis, it would still involve a violation of the FET standard, so perhaps both Parties would wish to
[Page 544]
reflect further on that and include it in their Post-Hearing Submissions.
ARBITRATOR MAYER: Also the third question was put to both Parties, I recall: The burden of proof.
MR. FRIEDLAND: We would be ready to address it tomorrow, but we leave it to you to direct us.
PRESIDENT SACHS: I think it could be helpful in developing our questions, the final questions, that you should deal with in the Post-Hearing Briefs, so we would welcome an exchange, preliminary exchange, without prejudice on these questions.
And we thought about it again, and we would prefer to have it in the morning, so prior to hearing the Experts, so that we have a fresh start and concentrate. In particular for my colleagues who sit in Europe, they would, yes, like to have it not at the end of a very long day but at the beginning of a very long day.
MR. NYER: Mr. Chairman, tomorrow is indeed a very long day--indeed the longest day of testimony this week that we have on the schedule, so I wonder if Friday morning might be an alternative.
PRESIDENT SACHS: Okay. We are flexible.
[Page 545]
We are flexible. If you feel the Friday program is lighter, then we should move it to Friday.
MS. LAMB: Either is fine for us. I'm happy to say Friday.
MR. FRIEDLAND: It would be first thing Friday, then.
PRESIDENT SACHS: Okay. First thing Friday. Fine. Anything else?
So, thank you very much. See you again tomorrow morning at 8:30.
(Whereupon, at 1:16 p.m. (EDT), the Hearing was adjourned until 8:30 a.m. (EDT) the following day.)
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I, David A. Kasdan, RDR-CRR, Court Reporter, do hereby certify that the foregoing proceedings were stenographically recorded by me and thereafter reduced to typewritten form by computer-assisted transcription under my direction and supervision; and that the foregoing transcript is a true and accurate record of the proceedings.
I further certify that I am neither counsel for, related to, nor employed by any of the parties to this action in this proceeding, nor financially or otherwise interested in the outcome of this litigation.
Signature
DAVID A. KASDAN