In the recent high profile case, in which the controlling shareholders had the managers issue convertible shares to themselves for less than fair market value, it was held that the mere transfer of wealth between shareholders might constitute the damages to corporation, and thereby invoke the liability of the directors. In fact, such decision was merely one example of well-established case law, which found breach of director's fiduciary duties to the “company” even if there was no actual loss to the company. This case law should be 연구논문subject to close theoretical examination, because when the company engages in the transactions with shareholders, it tends to end up with transferring wealth from one shareholders to the other shareholders. In such case, the company as a separate entity from shareholder interest has no reason to complain about it, but for any returning money to shareholders. It may therefore be argued that the directors, who are supposed to serve the “company”, not the individual shareholder or shareholders as a group, should not be subject to criminal or civil liability to the “company”, letting aside the liability to individual shareholders. Such theoretical conclusion, however, should be reconsidered when the ownership structure of Korean corporate group is taken into account. Most Korean corporate groups are controlled by small number of families, who are likely to pursue private benefit through many illegal transactions. Issuance of shares or convertible shares for less than their fair market value have been commonly used for this purpose. In other worlds, since the Korean corporate managers are controlled by a controlling shareholder, the breach of fiduciary duty by such managers tends to transfer wealth from minority shareholders to a controlling shareholder, rather than reducing the corporate assets themselves. If it is the case, such misbehavior should be regulated. This paper proposes a new solution to this problem. Given the notion of “corporation” as a separate entity, the managers are liable only when there is damages to the “corporation”, rather than to a group of shareholders. This paper argues that, the wealth transfer transactions that do not seem to cause any damages to company can be separated into the following two transactions: (1) reduction of corporate assets (damages to corporation), and (2) controlling shareholder's reinvestment of such amount of money (reinvestment). The final outcome of combining these two transactions is the wealth transfer without no reduction of corporate assets. Since the reinvestment by the controlling shareholder should not be relevant in determining the manager's breach of fiduciary duty, the transfer of wealth is equivalent to the reduction of corporate assets in terms of director's liability. According to this solution, the wealth transfer transaction may be regulated even under the current case law.