"Targeting Ssangyong Motor Theme Stocks" Jung Eun-bo, Financial Supervisory Service Chief... "Strict Measures if Unfair Trading Detected"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Myunghwan] Jung Eun-bo, Governor of the Financial Supervisory Service (FSS), stated, "We will focus our investigative capabilities to swiftly respond to specific theme stocks whose prices show abnormal fluctuations during the sale process of insolvent companies, and strictly take action against any discovered illegal activities." This remark is interpreted as targeting the recent repeated sharp fluctuations in the stock prices of companies related to the Ssangyong Motor acquisition battle.

According to the FSS on the 7th, Governor Jung made these remarks at an executive meeting related to the capital market, emphasizing that a virtuous cycle structure where corporate restructuring through the capital market operates normally must be established.

Governor Jung expressed concern, saying, "Recently, during the restructuring process through the acquisition of listed companies, there have been situations where the capital market is abused, leading to a decline in market credibility and potential damage to investors." This is understood as pointing to the trading suspension of Edison EV, which recently announced its intention to acquire Ssangyong Motor, and the sharp stock price fluctuations of stocks related to the Ssangbangwool Group.

He continued, "To respond swiftly to specific theme stocks, we must systematically cooperate with related organizations such as the Korea Exchange and closely coordinate with relevant departments (disclosure, investigation, accounting) to concentrate investigative capabilities." He emphasized, "If unfair trading suspicions are found, thorough investigations should be conducted in consultation with the Financial Services Commission's Capital Market Investigation Team, and strict measures should be taken against illegal activities."

Examples of illegal activities include ▲the possibility of raising stock prices by disclosing or promoting unverified positive information such as new business investments through the acquisition of insolvent companies or exaggerating business content through media reports ▲the potential use of undisclosed information obtained during the acquisition of listed companies by investment associations or private equity funds.

Governor Jung urged that related companies be classified as high-risk groups for disclosure review, and that important omissions or false statements in disclosure documents submitted by companies, such as securities registration statements, periodic reports, and major event reports, be thoroughly examined. At the same time, he requested a focused review of the audit reports of the relevant companies and prompt action if necessary.

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