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SBI Savings Bank vs. SK Securities Lawsuit Over 'Horse Oil Cream' Concludes After Nearly 6 Years

[비즈한국] It has been confirmed that the legal battle between SK Securities001510 and SBI Savings Bank regarding investments in the once-popular "horse oil cream" in the cosmetics market has recently concluded after nearly six years. SBI Savings Bank, which acted as a bondholder providing funds for SK Securities and Waterbridge Partners to acquire a horse oil cream manufacturer, filed a lawsuit for damages due to the non-repayment of corporate bonds. During the trial, the principal and interest were repaid by SK Securities and others, allowing for the recovery of funds after nine years.

On November 13, 2025, the 21st Civil Division of the Seoul Central District Court ruled against the plaintiff, SBI Savings Bank, in a lawsuit for approximately 200 million won in damages filed against the defendants, SK Securities, SKS Private Equity (PE), and Waterbridge Partners. The court ordered each party to bear their own litigation costs. SBI Savings Bank first filed the lawsuit in March 2020. It took about six years to reach a verdict. As neither side appealed, the first-instance ruling was finalized on December 4 of last year.

The incident originated in July 2015 when SK Securities and Waterbridge Partners invested in the cosmetics manufacturer BNB Korea. BNB Korea was the manufacturer of the horse oil cream that became a massive hit after being featured on beauty programs at the time. SK Securities and Waterbridge Partners set up a Private Equity Fund (PEF) and used it to establish a Special Purpose Company (SPC) called WS Beauty to acquire a 100% stake in BNB Korea. SKS PE is a PEF management firm established by SK Securities after spinning off its PE division.

In August 2015, SBI Savings Bank acted as a bondholder, purchasing 5 billion won in corporate bonds issued by WS Beauty. To secure acquisition funds, WS Beauty issued 40 billion won in private bonds at a 5% interest rate. Along with SBI Savings Bank, other bondholders included Shinhan Investment Corp., Woori Financial Capital, and NH Investment & Securities.

However, as the investment failed, SK Securities and Waterbridge Partners were hit by a series of lawsuits from Limited Partners (LPs). BNB Korea's performance surged after developing horse oil cream in 2013, but it began to report losses starting in 2016. While China's retaliation over the THAAD (Terminal High Altitude Area Defense) deployment negatively impacted profitability, the suspension of the contract with Clairs Korea, the core distributor of the horse oil cream, had a greater effect. At the time, over 80% of BNB Korea's revenue came from transactions with Clairs Korea.

SBI Savings Bank argued that SK Securities and Waterbridge Partners violated their duty of disclosure by failing to inform them of the core risks associated with the BNB Korea investment. These core risks included: the fact that BNB Korea was an Original Equipment Manufacturer (OEM) rather than an Original Development Manufacturer (ODM) for the cream; the situation where the contract with Clairs Korea could not be sustained; and Clairs Korea's plan to build its own production facility for the cream.

Alleging that the joint illegal actions of both parties caused a loss of the 5 billion won in unpaid principal, SBI Savings Bank filed a lawsuit (a partial claim) seeking 210 million won, representing a portion of the principal, along with delay damages. During the trial, SBI Savings Bank argued, "If we had known about the risks in advance, we would not have purchased the bonds," and claimed that "SK Securities and Waterbridge Partners were aware of these risks in August and September 2015 but did not disclose them."

The court dismissed all of SBI Savings Bank's claims. The reason was that in October 2024, four years and seven months after the lawsuit began, SK Securities and Waterbridge Partners repaid approximately 5.756 billion won to SBI Savings Bank, covering both the principal and unpaid interest of the bonds.

The first-instance court ruled, "While SBI Savings Bank's arguments have merit, the result is a loss due to the repayment. Although it is the principle that the losing party covers litigation costs, because this lawsuit was necessary to protect the plaintiff's rights, each side shall bear its own costs."

While SBI Savings Bank succeeded in recovering its lent funds and interest after a long legal battle, the liability of SK Securities and Waterbridge Partners remains. This is because, in previous lawsuits filed by LPs, the court recognized that the two companies had violated their investor protection duties.

In November 2025, the Supreme Court released its third-instance ruling on a damages lawsuit filed against the two companies by Daol Savings Bank (formerly Eugene Savings Bank), an LP in the PEF. While Daol Savings Bank lost in the first instance, the result shifted to a partial victory for them in the second instance, with the court finding SK Securities and Waterbridge Partners liable. In the third instance, the Supreme Court also ruled that "the two companies violated their duty to provide important information." However, it remanded the case, citing issues in the calculation of damages.

According to SK Securities' public filings, there are five remaining damages lawsuits filed by LPs regarding the horse oil cream investment. Two lawsuits filed in 2018 by five companies, including Daol Savings Bank, are currently in remand trials, and first-instance trials are ongoing for cases involving Shinhan Investment Corp., Mirae Asset Securities006800·BNW Investment, and KDB Capital. The total amount in litigation reaches 26.5 billion won.