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Photo = FSS |
[Alpha Biz= Reporter Kim Jisun] The financial authorities have launched a formal investigation into allegations of unfair trading practices related to Korea Zinc's rights issue. At the heart of the allegations is whether the company simultaneously planned a share buyback and a rights issue. If confirmed, the investigation is expected to focus on Chairman Choi Yoon-beom.
According to the financial authorities on the 3rd, the Financial Supervisory Service (FSS) is conducting an on-site inspection of Mirae Asset Securities, the underwriter for Korea Zinc's share buyback, to clarify the facts surrounding the share buyback and the rights issue. The FSS believes that if the Korea Zinc board planned to acquire shares through a buyback and subsequently redeem them through a rights issue, it would constitute unfair trading.
The FSS has determined that there is an unreasonable timeline for a major rights issue decision, internal approval, legal consultation, and the preparation of a securities registration statement within just four business days from the end of the share buyback (on the 23rd of last month) to the announcement of the rights issue (on the morning of the 30th). Such processes typically take one to two months. An FSS official stated, “If there was no prior planning, this timeline would be unreasonable, and it is unlikely that Mirae Asset Securities was unaware of this.” They added that their focus is on clarifying the timeline related to these events through inspections and investigations.
Should evidence of unfair trading practices be identified, the investigation is likely to extend to Chairman Choi Yoon-beom, as any prior planning for a large-scale rights issue would require the approval or decision of the highest decision-maker. The FSS plans to quickly refer the case to investigative authorities once allegations are confirmed, potentially including Chairman Choi in the investigation.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
