[Reporter Seo Yeong-young Seo] The past ruling on the leveraged buyout (LBO) claimed by the Daewoo Securities union ahead of Mirae Asset's acquisition of Daewoo Securities is eye-catching.

LBO is one of the financing methods for a company to buy a company ahead of a merger and acquisition (M&A), and it is a method used to raise funds from financial institutions using the assets of the company to be purchased as collateral to carry out M&A with little equity capital.

"Later, in 2010, the funding method used in Dongyang Major's joint venture between Korea and Japan was ruled not guilty, giving breathing room to companies seeking to raise funds through LBOs in Korea," he said, adding, "This shows the court's attitude that all LBOs will be judged on a case-by-case basis rather than concluding that all LBOs are not guilty.

Mirae Asset Securities' merger with Daewoo Securities is currently in the midst of a dispute between the company and the union over restructuring issues and whether the LBO embezzlement law applies.

In response, a Mirae Asset Securities official said, "An LBO is a borrowing of funds using the assets of the target company as collateral," and countered, "It is difficult to consider it an LBO because we will borrow funds using Daewoo Securities shares as collateral."

However, Jung countered, "It seems inevitable that a company will divert funds from the target company after a merger when it acquires a company."

In early 2014, the Ministry of Strategy and Finance announced a plan to revitalize M&A and said it would prepare guidelines for LBOs. However, the guidelines were later abandoned. The government explained its failure to provide guidelines by saying that "M&A cases are too diverse," and that "even if guidelines are provided for complex cases, they may be overturned at the discretion of the tribunal."