Chairman Byeon Sang-gi of Gukdong, Timely Buyback of Company Shares Just Before 'Positive News'

[Asia Economy Reporter Jang Hyowon] It has been revealed that Byun Sang-gi, chairman of Kukdong, an original equipment manufacturer (OEM) in the clothing sector, purchased treasury shares before major favorable disclosures such as large-scale exports or investments in bio companies, resulting in several times the valuation gains.

Chairman Byeon Sang-gi, Gukdong.

According to the Financial Supervisory Service's electronic disclosure on the 20th, Kukdong signed a supply contract worth 38 billion KRW for protective suits with a U.S. company on the 4th. Subsequently, on the 7th and 12th, additional supply contracts totaling 41.8 billion KRW were signed, achieving about 35% of last year's total sales in a short period.

As a result, the stock price surged. Kukdong's stock price reached 3,970 KRW intraday on the 14th, marking the highest point in about 2 years and 1 month since April 2018. This represents a 221.46% increase compared to the beginning of the year.

About a month before this sharp rise in stock price, Chairman Byun Sang-gi purchased treasury shares. Byun bought 55,000 shares of Kukdong on March 19, 30, and 31. Byun Young-seop, Byun’s son and director, also purchased 50,000 shares. The total purchase amounted to approximately 150 million KRW.

The average purchase price was around 1,400 KRW, which, compared to the 14th, rose about 180% in roughly a month. The estimated valuation gain is about 260 million KRW.

This is not the first time Chairman Byun profited from buying treasury shares before favorable news. In February, he also purchased shares before investing in the bio venture company Humap, which sparked controversy.

Humap is a company that developed 'Synthese,' a transgenic mouse platform producing fully human antibodies. It was founded by Oh Chang-gyu, former co-CEO of ToolGen, a KONEX-listed company known for gene-editing technology.

Between February 11-14 and 17-19, Chairman Byun purchased 31,500 shares of Kukdong several times. The average price was about 1,164 KRW.

Subsequently, on February 25, Kukdong issued convertible bonds (CB) worth 15 billion KRW to The Y Holdings, a personal company of Humap CEO Oh Chang-gyu. Additionally, an agenda item was proposed at the general shareholders' meeting to appoint Oh and other Humap personnel as directors.

After the investment in Humap was disclosed, Kukdong's stock price surged 108% from 1,075 KRW to 2,235 KRW within eight trading days. If Chairman Byun was aware of the Humap investment when purchasing shares, there is a possibility of insider trading.

An official from the Korea Exchange stated, "If the disclosure is material information affecting the stock price and shares were purchased after prior knowledge, it could be considered insider trading. However, since there is room for interpretation, it needs to be examined whether there is an actual charge."

In response, a Kukdong representative said, "We understand that Chairman Byun purchased shares to defend the stock price as it had fallen to the 1,000 KRW range. He did not invest with prior knowledge of the Humap investment or the protective suit export deal."

This content was produced with the assistance of AI translation services.