Shinhan Investment Corp: "Illegal Short Selling Claims Groundless... Considering Legal Action"

"Short Selling Systematically Impossible... Misunderstanding Due to Computerized Notation Method"

[Asia Economy Reporter Minwoo Lee] Shinhan Financial Investment has denied the recent illegal short-selling controversy as completely unfounded. The company plans to consider legal action in the future.

On the 23rd, Shinhan Financial Investment stated that the allegations of illegal short-selling are entirely false, and if such false information continues to be spread, damaging the company's image and reputation, they will take all possible legal measures, both civil and criminal.

Earlier, when the sell orders of HL Biopharma, classified as an anticancer drug-related stock, were released through Shinhan Financial Investment's trading window, rumors spread among investors that Shinhan Financial Investment was conducting illegal short-selling using the company's proprietary account. As a result, on the 21st, "Shinhan Illegal Short-Selling" ranked high in real-time search terms on major search portals.

Shinhan Financial Investment firmly denied these claims. They explained, "From March 16, when short-selling was banned, until the 21st, the trading volume of the relevant stock through Shinhan Financial Investment's proprietary account was related to liquidity provider (LP) activities for the 'KOSDAQ 150 Index Exchange-Traded Fund (ETF)', which has nothing to do with short-selling. This volume accounted for only 0.04% of the total trading volume, an extremely negligible amount that could not possibly affect the stock price."

They also refuted the claim of short-selling through individual customer accounts. Shinhan Financial Investment stated, "Most HL Biopharma stock orders through our trading window are customer orders, with an average of 1,000 customers trading the stock, and over 4,000 customers during periods of high price volatility. In 2015, during the acquisition of HL Biopharma's subsidiary shares, we conducted investment banking (IB) transactions, and a significant number of HL Biopharma shares issued through third-party allotment were deposited and traded in our accounts. We also handled the 2018 paid-in capital increase of HL Biopharma Life Sciences, so many shareholders hold accounts with us." They emphasized that the large cumulative net selling and high trading volume of HL Biopharma through Shinhan Financial Investment is a natural phenomenon. Since short-selling is banned, no short-selling by institutions or foreigners has occurred, and it is systemically impossible.

Shinhan Financial Investment explained that the large volume of HL Biopharma sell orders through their trading window was due to a system error. On the 21st, among the top six trading windows by volume, Kiwoom Securities, NH Investment & Securities, and KB Securities recorded net buying volumes ranging from about 5,700 to 97,000 shares, while Mirae Asset Daewoo and Samsung Securities showed net selling volumes of approximately 14,500 to 25,500 shares. In contrast, only Shinhan Financial Investment showed a net selling volume of about 236,500 shares. A YouTuber claimed this was evidence of illegal short-selling, citing the phenomenon where Shinhan Financial Investment's net selling volume appeared large during or after trading hours but decreased when checked the next day, alleging that Shinhan Financial Investment first sold shares and then repurchased them to cover the position.

In response, Shinhan Financial Investment stated, "When our trading volume ranks within the top 5 dealers but then falls below 5th place, the trading volume is fixed at that level and does not reflect changes. On the 21st, our trading volume for the relevant stock appeared as over 200,000 shares of net selling during the day because the intraday buy volume dropped to 6th place and was fixed. However, after accurate post-market aggregation, the net selling volume for the 21st, as viewed the next day, was 23,000 shares."

Shinhan Financial Investment is considering legal action if the spread of false information continues. They stated, "Despite the illegal short-selling allegations being completely untrue, if such content is disseminated, damaging the company's image and reputation and causing harm, we will take all possible legal measures, both civil and criminal."

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