[Click eStock] "SKC Embezzlement and Breach of Trust Issue, Turning into an Opportunity with Expanded Shareholder Returns"

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities analyzed on the 8th that the suspension of trading due to SKC's disclosure related to the indictment of the former management for embezzlement and breach of trust could serve as an opportunity for strengthening internal controls and expanding shareholder return policies, turning adversity into opportunity.

Former SKC Chairman Choi Shin-won was recently arrested and indicted on charges of embezzling and breaching trust involving approximately 223.5 billion KRW of company funds. Consequently, trading of SKC was suspended on the 5th, with a response deadline set for 6 PM on the same day. Analyst Hwang Yoo-sik of NH Investment & Securities stated, "If a response is disclosed, the trading suspension will be lifted, but since the embezzlement and breach of trust amount exceeds 2.5% of equity capital, another two-week trading suspension is expected for a listing eligibility review."

According to the prosecution, former Chairman Choi was indicted on charges of embezzlement and breach of trust amounting to approximately 223.5 billion KRW across six companies. SKC is also accused of causing its subsidiary SK Telesys to receive three rounds of paid-in capital increases totaling 93.6 billion KRW. Analyst Hwang said, "The main focus of the listing eligibility review is securing the adequacy of internal controls," adding, "To this end, SKC plans to establish an internal transactions committee within the board of directors and strengthen the authority of the personnel committee to evaluate the activities of key executives including the CEO. Additionally, in response to shareholder rights damage caused by the trading suspension, the company is expected to enhance its shareholder return policy."

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