"Inbosa Scandal Breaks Out"... Kolon Employee Who Sold Stocks Early

[Image source=Yonhap News]

[Asia Economy Reporter Koh Hyung-kwang] It has been confirmed that Kolon employees who sold stocks in advance after knowing adverse information during last year's 'Kolon Invossa incident' to avoid losses were caught by financial authorities and fined.

According to financial authorities on the 20th, the Securities and Futures Commission under the Financial Services Commission imposed fines on two Kolon affiliate employees, Mr. A and Mr. B, on the 22nd of last month for unfair gains through stock trading using undisclosed information (market disorderly conduct under the Capital Markets Act).

Both individuals, belonging to a local factory of a Kolon affiliate, received adverse undisclosed information related to Invossa, which Kolon Life Science was developing, from a head office employee on March 29 last year, and sold their holdings of Kolon Life Science and Kolon TissueGene stocks. Mr. A, who sold 5,419 shares, was fined 119.69 million KRW, and Mr. B, who sold 950 shares, was fined 22.7 million KRW.

Invossa was the first gene therapy approved by the Ministry of Food and Drug Safety (MFDS) in Korea in 2017, but in March last year, it was revealed that one of its main components was not cartilage cells as stated in the approval, but kidney cells that could potentially cause tumors.

Accordingly, the MFDS banned Kolon Life Science from domestic sales and distribution on March 31 last year. Before the MFDS action, Kolon Life Science's stock price fluctuated around 80,000 KRW but plummeted to the 20,000 KRW level within two months.

Kolon TissueGene also received a delisting recommendation from the Korea Exchange's Listing Committee. However, it was granted a 12-month improvement period.

The Financial Services Commission's Capital Market Investigation Team judged that Kolon executives obtained adverse undisclosed information before the MFDS announcement to avoid losses from the subsequent stock price decline. Additionally, the allegations against other Kolon executives who provided the information to Mr. A and Mr. B were reported to the prosecution.

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