B, the former head of KOSDAQ-listed Company A‘s overseas sales team, anonymously posted a false message on the Cheong Wa Dae (Blue House) national petition board as the company’s external audit was being completed. The message claimed that Company A earned a cumulative amount of over KRW 10 billion in false sales, committed a loan fraud worth tens of billion won by presenting inflated sales records, and separately committed an investment fraud of KRW 7 billion.

As a result, the external auditors notified Company A and its parent company, Company C that additional audits were required to verify the false report. However, the contents of the report were not properly verified before the audit report submission deadline, and both Company A and Company C received a “qualified opinion” in their audit reports. Company C was also subjected to a one-year suspension of stock trading. Furthermore, B's report led to prolonged investigations by the Financial Supervisory Service, the National Tax Service, the police, and the prosecution.

We represented Companies A and C, which were on the verge of delisting, in filing a lawsuit against B, the anonymous whistleblower at the time, on charges of defamation and damaging their credit. We also sought damages from B. The key issues of this case were whether Company A made false sales amounting to KRW 10 billion and committed loan fraud and investment fraud based on these inflated sales, and the resulting damages of B’s actions if they were found liable for defamation and damage to credit charges.

Through investigations by the police and prosecution, we quickly identified B as a suspect and subsequently provided a detailed explanation of sales across all areas. We then thoroughly demonstrated that neither Company A nor Company C had engaged in false sales, nor committed loan or investment fraud. Instead, we proved that B harbored ill will against Company A and made false whistleblower claims. Furthermore, unlike the original ruling, we successfully persuaded the appellate court in the damages suit, that additional audit fees and re-audit costs were damages directly linked to B's unlawful actions. As a result, the court ruled that the victims involved with Company A were entitled to high compensation.

In a situation where Company A and Company C were on the verge of delisting, we quickly identified the anonymous whistleblower, secured a criminal conviction, and obtained a favorable ruling for damages, leading to the recovery of the aforementioned companies and their current sound growth.