Share in the Unjust Profits of Business Partners

Basic Principles

  • 1. Never acquire unjust share of listed or unlisted stocks of business partners with interest in a matter.
  • 2. Joint investment or acquirement of property jointly owned with interested parties is unjust and when violated, is considered as receiving money from the interested parties in the amount corresponding to the share based on the existing share ownership.

Guidelines for Procedures

You may see details clicking or tapping each item.

  • 1. Receipt of Stocks and Investment
    Classification Examples Basic Principle(s) Remarks
    Listed Stocks All stocks of companies in business relations with the company Disposal or sale in accordance with company policies
    • - Excludes affiliated companies of LX and companies included in the KOSPI200 and KOSDAQ 50
    • - Decisions for transactions in companies other than the above are made after examining the possible influence on the company
    Unlisted Stocks All stocks of companies in business relations with the company Immediate disposal and prohibition on sale Possession and dealing of unlisted stocks are prohibited at all times
  • 2. Joint Investment and Acquirement of Joint Property
    Classification Examples Basic Principle(s) Remarks
    Joint Investment / Acquirement of Joint Property Acquirement of movable / immovable estates through joint investment of capital,
    memberships for condominium, golf, health club, etc., investment in real estates
    Prohibited Disposal of shares upon reporting
    Joint Venture Business Possession of joint company through joint investment of capital or name registration, business administration from joint venture Prohibited  
    Concurrent Office in Cooperative Company Registered as an executive, hold current office as an employee and execute substantial duties at the company of interest parties Prohibited  

1. Basic Principles

  • (1) Never acquire listed or unlisted stocks of business partners with interest in a matter.
  • (2) Joint investment or acquirement of property jointly owned with interested parties isn't permitted and when violated, it is considered as receiving money from the interested parties in the amount corresponding to the share based on the existing share ownership.
    Basic types of sharing unjust profits are as follows, along with other types of acquiring jointly owned properties with interested parties
    • - Receipt and investment of listed/unlisted stocks
    • - Joint investment or joint ownership on movable/immovable estates

2. Forms of Share in the Unjust Profits and Possible Violation of Code of Ethics

  • (1) Direct Share of Profits
    • - Employees personally receive stocks from interested parties or invest in it
    • - Employees personally acquire property through joint investment with interested parties
  • (2) Share of Profits through Third Party
    • - Possessing or investing in stocks of interested parties using names of families, relatives, in-laws or acquaintances
    • - Encouraging family, relatives, or friends to acquire or invest in shares of interested parties
  • (3) Possible Violation of Code of Ethics

    Any case of direct investment or stock investment through names of third party or acquirement of joint property are all considered as violation of code of ethics. Moreover, even if it is the case of encouraging a third party to invest and not for personal profit, it is considered as share in the unjust profits and a violation of code of ethics when execution of influence on interested parties occurs in relation to business affairs.

3. Receipt of Stocks and Investment

A. Applicable Deeds and Standard of Judgment

Classification Examples Basic Principle(s) Remarks
Listed Stocks All stocks of companies in business relations with the company Disposal or sale in accordance with company policies
  • - Excludes affiliated companies of LX and companies included in the KOSPI200 and KOSDAQ 50
  • - Decisions for transactions in companies other than the above are made after examining the possible influence on the company
Unlisted Stocks All stocks of companies in business relations with the company Immediate disposal and prohibition on sale Possession and dealing of unlisted stocks are prohibited at all times
Cooperative Companies Subject to Report

Basically, stocks of all companies registered as cooperative companies are subject to report

Even business partners not registered as cooperative companies are included, if the company can exercise influence on them in consideration of the relationship

Excludes stocks of LX affiliated companies, KOSPI 200 and KOSDAQ 50 Judgment is based on the standard that such companies are not at the level upon which LX can exercise its influence

Standard of Judgment for Stocks Subject to Report

Includes all stocks acquired by employees coinciding with duties executed in relation to business affairs

Even if employees currently have no relation to business affairs with the parties in question, stocks possessed or purchased during the engagement or are in a position exerting

influence at the time of acquirement, must be reported (except for the sale of listed companies)

All cases of substantial investment by employees including the use of borrowed names (i.e., interested parties such as relatives) are subjected to report

B. Guidelines for Procedures

  • (1) Possession of stocks belonging to interested parties who are associated with employees' duties (includes the case of nonexistence of direct relation at present) is strictly prohibited as matter of unfair transactions.
  • (2) LX, in the name of CEO, shall arrange status report during a certain period of time (beginning of every year) on employees' possession of stocks of business partners and take follow up measures in accordance with the set standard on the possessed stocks arranged during this time. Result of such measurement is to be collected by the Ethics Bureau for further management.
  • (3) All cases of employees' substantial investment (under own names or borrowed names) in stocks of all companies with relation to LX and also in relation to the duties of employees (also including the case of nonexistence of direct business relation at present) are subject to report. Such cases are classified as follows and must be reported and registered.
    • - Possession of stocks of listed cooperative companies
    • - Possession or sale of stocks of unlisted cooperative companies
    • - Possession or sale of stocks of currently listed cooperative companies which were unlisted at the time of possession
  • (4) Possession of stocks due to unavoidable circumstances is managed as follows.
    • - Listed stocks of cooperative companies that are considered to be influenced by LX in business relations (management result, stock value, etc.), in LX's judgment must be liquidated immediately and buying and selling are prohibited, hereafter.
    • - Unlisted stocks of cooperative companies, regardless of whether or not LX is capable of affecting the relation with such companies, must be liquidated immediately and buying and selling are prohibited, hereafter.
  • (5) If any unreported portion is recognized, all civil and penal responsibilities will be relegated to employees themselves and business partners may be cut off from business relations with LX.
  • (6) When problems occur even after stocks have been settled in accordance with regulations upon voluntary reporting of employees, intention will be questioned and appropriate measures will be taken in accordance with LX policies.

4. Joint Investment and Acquirement of Joint Property

A. Applicable Deeds and Standard of Judgment

Classification Examples Basic Principle(s) Remarks
Joint Investment / Acquirement of Joint Property Acquirement of movable / immovable estates through joint investment of capital,
memberships for condominium, golf, health club, etc., investment in real estates
Prohibited Disposal of shares upon reporting
Joint Venture Business Possession of joint company through joint investment of capital or name registration, business administration from joint venture Prohibited  
Concurrent Office in Cooperative Company Registered as an executive, hold current office as an employee and execute substantial duties at the company of interest parties Prohibited  

B. Guidelines for Procedures

  • (1) Cases of joint acquirement of movable or immovable estates by employees and their families with interested parties (regardless of purpose) are considered as receipt of money from the interested parties.
    • Includes personal assets under joint names on memberships for condominium, golf and health club and real estate along with all other personal assets in substantial ownership portion even if acquired in names of others.
    • In cases of joint investment based on personal acquaintance prior to the business relation with LX, employees must report such facts to the Ethics Bureau and dispose their shares.
  • (2) Employees or their family members having ownership of business partners (in business relation with LX) through joint investment with interested parities is strictly prohibited.
  • (3) Any case affecting business relations such as employees being registered as executives at the company of interested parties, concurrently holding office or substantially executing duties of the corresponding company, is strictly prohibited even if there is no joint investment.

Code of Ethics