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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korean financial authorities have launched a joint investigation into Intops over allegations that its exchangeable bond (EB) structure may have encouraged short selling and suppressed its share price.
According to financial investment industry sources on June 8, the Financial Services Commission, Financial Supervisory Service, and Korea Exchange will jointly examine the case.
Authorities plan to review the appropriateness of disclosures at the time of issuance, as well as whether any unfair trading practices occurred. A senior government official stated that the investigation would focus on potential violations related to market manipulation.
Earlier reports alleged that Intops attached a call option (issuer’s right to repurchase) to its exchangeable bonds in a manner that effectively capped share price gains, thereby creating conditions that could incentivize short selling.
Additional concerns have been raised that, despite government initiatives encouraging share buyback cancellations to boost corporate value, the company may have used treasury shares to suppress its stock price. Reports also suggested that a member of the controlling family purchased shares during this period.
President Lee Jae-myung publicly commented on the matter, sharing the related report on social media and questioning whether the case constituted stock price manipulation. He reiterated his concerns during a press conference marking the first anniversary of his inauguration.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
