Kolon Life Science faces 88.5-billion-won damage lawsuits

Mitsubishi Tanabe seized property worth 14.4 billion won in Korea

Mundipharma suspends outstanding contract payment of 15 billion won

Kolon Life Science is facing a series of damage lawsuits asking for 88.5 billion won as compensation for the Invossa incident.

 

Kolon Life Science stated in the third quarter report that the company’s properties have been seized by Mitsubishi Tanabe and outstanding contract payment from Mundipharma has been suspended.

 

It is facing number of damage lawsuits filed by individuals and insurance companies since last May.

 

1,572 individuals and companies from home and abroad demanding 88.5 billion won As of last Oct.

 

31, 1,572 individuals have filed litigation cases against Kolon Life Science.

 

Most of them are shareholders of Kolon Life Science and Kolon TissueGene.

 

Some of patients who had been taking Invossa are claiming the damage as well.

 

Other 19 corporations, including Kyobo Life Insurance Company, KB Insurance, and Meritz Fire & Marine Insurance, have also decided to sue Kolon Life Science.

 

Their total litigation value adds up to 58.4 billion won.

 

Meanwhile, Japan-based Mitsubishi Tanabe has submitted a request for arbitration to International Chamber of Commerce (ICC).

 

The Japanese company demands the Korean company to return the upfront payment of JPY 2.5 billion (about 26.9 billion won) and to pay about 300 million yen (3.2 billion won) for damage.

 

Regarding the issue, Kolon Life Science explained “The company received 2.5 billion yen as an upfront payment, without a return condition, when Mitsubishi Tanabe and Kolon Life Science signed the technology transfer deal in 2016.

 

But in December 2017, Mitsubishi Tanabe requested for contract cancellation and return of contract payment, and in last May, the company submitted a request for arbitration to ICC against Kolon Life Science as it added another grounds for the contract revocation”.

 

As a result, Kolon Life Science faces litigation value of about 88.5 billion won from companies in and out of Korea.

 

List of damage lawsuits filed against Kolon Life Science

14.4 billion won-worth property frozen, 15 billion won contract payment suspended The third quarter report also disclosed the fact Kolon Life Science’ property worth 14.4 billion has been put under provisional attachment by Mitsubishi Tanabe.

 

Kolon Life Science headquarter building seized by Mitsubishi Tanabe

Mitsubishi Tanabe requested Korean courts to attach three of Kolon Life Science’ real estate properties under provisional attachment, and Daegu, Cheongju, and Seoul Southern District Courts ruled seizure of Kolon Life Science’ assets.

 

Accordingly, land and building of Second Gimcheon Plant (valued at around 3.3 billion won), land and building of Chungju Plant (valued at around 7.8 billion won), and Magok headquarters building (valued at around 3.3 billion won) have been seized.

 

Also the outstanding contract payment from Mundipharma has been put on hold.

 

Kolon Life Science may have to return the already received 15 billion won.

 

Previously, Kolon Life Science and Mundipharma signed a license deal worth of 30 billion won in November, 2018.

 

Mundipharma agreed to pay the Korean company 15 billion won each in the third and fourth quarter of this year.

 

The company has received 15 billion won from the global company in the past third quarter as stated on the agreement.

 

But in last May, Kolon Life Science agreed on signing Mundipharma as pledge of movables for collateral security, which in result suspended the outstanding fourth-quarter payment of 15 billion won.

 

And when the pledgee’s condition is activated, Kolon Life Science may have to return the received 15 billion won.