'Ttasang Shinwha' ADM Korea, the Mystery of the Lower Limit Block Deal

Block Deal of Entire Shares by 2nd and 3rd Largest Shareholders
Sold at the Lowest Price Amid Rising Trend
Trading Volume Surges from 200,000 to 60 Million Shares
"Will Not Tolerate Manipulators of Sharp Price Fluctuations"

[Asia Economy Reporter Ji Yeon-jin] The 2nd and 3rd largest shareholders of ADM Korea, a company listed on the KOSDAQ, sold all their shares?equivalent to the largest shareholder's stake?at the lower limit price through a block deal. This is an unusual situation of selling shares at a bargain price amid a rising stock price during a management rights dispute.

According to the Financial Supervisory Service's electronic disclosure system on the 20th, Cho Mi-hyun, the 2nd largest shareholder and clinical advisor of ADM Korea, and Yoon Seok-min, the 3rd largest shareholder and former CEO of ADM Korea, sold 3,575,550 shares and 3,142,700 shares respectively through pre-market block trades on the 14th. They block-dealed all the shares they held.

The disposal price for both parties was 5,030 KRW, about 30% lower than the previous day's closing price. According to KOSDAQ market regulations, pre-market block trades are decided by negotiation between the seller and buyer within the day's upper and lower price limits. These shareholders transferred their stakes at the lowest price allowed by the regulations.

ADM Korea is a contract research organization (CRO) that conducts clinical trials for pharmaceutical companies. When it was listed on the KOSDAQ market in June last year, its opening price was twice the public offering price, and it drew attention by hitting the upper limit price on the first day of trading, known as "ttasang." Shortly after the listing, in July last year, clinical advisor Cho filed a management rights dispute lawsuit demanding his appointment as an inside director, which was dismissed by the court. After the initial surge, the stock price declined but then surged sharply on news of the management rights dispute.

Afterwards, the stock price trended downward but began a gentle upward curve from February this year. Notably, it rose for four consecutive trading days starting from the 7th, dipped slightly on the 13th after the announcement of a rights offering, and on the 14th?the day the 2nd and 3rd largest shareholders block-dealed at the lower limit price?the stock opened with a 15% surge compared to the previous day. The 10 billion KRW rights offering was issued as redeemable convertible preferred shares, which cannot be listed in the future, and involved institutional investors such as Mirae Asset Securities, acting as a positive factor for research and development (R&D).

On that day, ADM Korea's stock price jumped to 8,330 KRW, up 15% in early trading, but then sharply declined to the intraday lower limit price. Trading volume, which had averaged around 200,000 shares until the 7th, surged over 30 times to 60 million shares that day. Among small shareholders, rumors circulated about the largest shareholder selling shares and embezzlement. CEO Lim Jong-heon of ADM Korea stated in a notice on the company website, "As of the end of 2021 based on shareholder status, the 2nd and 3rd largest shareholders have no business relationship with the company," and added, "We will never tolerate stock price fluctuations caused by forces that promote rapid price changes through unverified rumors."

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