Ostem Relieved by 'Listing Maintenance' but 40,000 Retail Investors Tremble Amid Panic Selling (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 28th, trading of Osstem Implant will resume. It has been four months since stock trading was suspended due to an embezzlement case involving an employee amounting to 200 billion KRW. Some 40,000 individual investors, whose investments were frozen for four months, have breathed a sigh of relief. However, their expressions are not entirely bright. A large volume of sell orders is expected, making a significant fluctuation in stock prices and a bearish trend inevitable. Since small shareholders hold a high proportion of shares, it seems unlikely to avoid a 'panic selling' fear.

The Korea Exchange announced on the 27th that the Listing Committee decided to maintain Osstem Implant's listing after review. Accordingly, trading of Osstem Implant shares will resume from the 28th.

The Exchange explained, "We confirmed that Osstem Implant improved its governance structure by appointing a majority of outside directors and establishing an audit committee through the shareholders' meeting held on the 31st of last month, and verified the appropriateness of the internal accounting control system operation regarding fund management through a third-party professional institution, leading to the decision to maintain the listing." It added, "Osstem Implant will disclose improvement plans to enhance management transparency and will announce the major quarterly implementation status until the end of this year."

Osstem Implant announced on January 3rd that it had filed a complaint against employee Lee for embezzlement in the course of duty, triggering a substantive review of listing eligibility. The embezzled amount was 221.5 billion KRW. After deciding to subject Osstem Implant to a substantive review of listing eligibility, the Exchange's Listing Committee discussed whether to maintain the listing at the meeting held on the 29th of last month but failed to reach a conclusion and decided to resume the discussion later. Some committee members expressed the opinion that the decision should be made after observing efforts to improve governance such as appointing outside directors and establishing various committees at the shareholders' meeting, as well as the appropriateness of the internal accounting control system operation, resulting in a postponement. It is understood that most of the issues examined by the Exchange have now been resolved.

Last month, Osstem Implant commissioned Samil Accounting Corporation to complete the design and application of an advanced internal accounting control system. To enhance management transparency, it also proceeded with ▲ appointing a majority of outside directors ▲ introducing an audit committee ▲ establishing an ethics management committee ▲ setting up an outside director nomination committee ▲ designating a compliance officer. These matters were included in the agenda of the shareholders' meeting and were all approved as originally proposed at the shareholders' meeting held on the 31st of last month, immediately after the Listing Committee meeting.

On December 30th last year, just before the trading suspension, Osstem Implant's closing price was 142,700 KRW, and its market capitalization was 2.0386 trillion KRW. As of the end of last year, there were 42,964 small shareholders holding 62.2% (8,888,944 shares) of the issued shares. Therefore, a large volume of sell orders is inevitable upon resumption of trading. The high proportion of small shareholders is a weakness. On the contrary, at the time of the resumption decision, some small shareholders viewed it as fortunate because it bought them time, which is expected to ease the 'sell-off' sentiment.

Meanwhile, Osstem Implant's performance is reaching record highs. It announced that its operating profit for the first quarter of this year was provisionally estimated at 51.2 billion KRW, a 100.5% increase compared to the same period last year. Sales amounted to 234.1 billion KRW, up 36.5% year-on-year. Sales are the highest ever recorded for a first quarter. Operating profit also surpassed 50 billion KRW for the first time in a quarter.

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