'Shinrajen Delisting' Exchange Chairman Sued, Police Launch Investigation

Shareholder Alliance "Sangsangin Savings Bank and Related Parties Used Undisclosed Information"
Claims Suspected Leak Before Disclosure of Listing Review Materials

[Image source=Yonhap News]

[Asia Economy Reporter Han Jinju] Following the notification of Shinilajen’s delisting decision last month, the police have launched an investigation into the shareholders’ complaint against Sohn Byung-doo, Chairman of the Korea Exchange, and its executives.

According to the police on the 17th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency summoned the Shinilajen Shareholders’ Union as a complainant for questioning the day before.

On the 9th of this month, the Shareholders’ Union filed a complaint with the Seoul Police Agency against Chairman Sohn and the executives for violating the Capital Markets and Financial Investment Services Act (prohibition of using undisclosed material information).

The legal representative of the Shareholders’ Union, law firm YK, stated, “Through the electronic disclosure system (DART) disclosure materials, it was identified that SangSangIn Savings Bank and its special affiliates used undisclosed material information, and evidence was submitted during the police investigation.”

They added, “Specifically, SangSangIn Savings Bank sold approximately 1.64 million shares, accounting for 87.3% of the 1.88 million shares it held, and SangSangIn Securities sold about 190,000 shares. If SangSangIn Savings Bank used undisclosed material information, the prevented loss is estimated to be up to 9.5 billion KRW.”

The Shareholders’ Union claimed, “SangSangIn Savings Bank is a major shareholder holding 3.12% of the Exchange’s shares. If the undisclosed material information from the Listing Committee was leaked, there is strong circumstantial evidence, confirmed by objective proof, that SangSangIn Savings Bank was the main party who used it.”

According to the Shareholders’ Union, on the afternoon of the 18th last month, around 2 p.m., when the Exchange’s Corporate Review Committee (Listing Committee) began, institutional investors massively sold shares of M2N, the largest shareholder of Shinilajen, causing the stock price to plummet. On that day, institutional investors net sold 1.85 million shares, and the stock price dropped by about 11%.

The Shareholders’ Union argued that the listing review materials and meeting contents were likely leaked before being made public. Minority shareholders are claiming the unfairness of the delisting and are urging for the resumption of trading. According to the Shareholders’ Union, as of midnight on that day, 1,086 Shinilajen investors had joined the complaint.

Earlier, the Korea Exchange decided to delist Shinilajen from the KOSDAQ market on the 18th of last month. On the 18th afternoon, the Exchange held a KOSDAQ Market Committee meeting to deliberate and resolve whether to delist Shinilajen, resume trading, or grant an improvement period.

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