[THE INVESTOR] GS Engineering & Construction shareholders’ collective suit against the company has resumed, with the preparatory procedures kicking off on Sept. 6.

The suit was originally filed in August 2013, but had been put on hold while it was being reviewed by the Supreme Court.

With the claims involved and the number of those who will be affected by the outcome of the suit standing at over 10,000, it is the largest suit of its kind in South Korea. 



GS E&C shareholders accuse the company of reflecting losses incurred in earlier project in its earnings report for the first quarter of 2013. The shareholders claim that by doing so, the company dealt 46 billion won (US$ 41.63 million) of damages to shareholders.

“The massive losses GS E&C disclosed were incurred not by the operations of the first quarter of 2013 but from losses from overseas industrial plant projects that existed beforehand,” Hannuri Law representing the plaintiffs said.

The law firm also claimed that GS E&C has been refusing to comply with court orders to provide information regarding six key overseas projects the company was conducting at the time.

On April 11, 2013, GS E&C posted consolidated operating and net losses of 535.4 billion won and 386 billion won, respectively. However, on March 29 of the same year, the company disclosed that its consolidated operating profit came to 160.4 billion won, and net profit to 108.4 billion won for 2012.

On March 29, 2013, when the figures for 2012 were disclosed, GS E&C shares closed at 55,300 won. However, they began dropping from April 1, the next trading day after the disclosure. Over the course of April 2013, GS E&C shares fell more than 25,000 won, or about 44 percent.

By Choi He-suk (cheesuk@heraldcorp.com)