Korea & Company "Requesting Financial Authorities to Investigate Allegations of Insider Trading in Tender Offer"

Korea & Company stated on the 26th, "We will formally request an investigation by the financial authorities regarding the allegations of preemptive trading that occurred before MBK Partners' tender offer announcement."

Earlier, a management dispute arose when MBK Partners announced its plan for a tender offer of Korea & Company shares earlier this month, but the tender offer ultimately failed. There are suspicions that MBK purchased shares in advance before proceeding with the tender offer, and Korea & Company intends to leave the judgment to the authorities.

Advisor Cho Hyun-sik of Korea & Company (left) and Chairman Cho Hyun-beom of Korea & Company Group [File Photo]

In a statement released that day, Korea & Company said, "We respect the shareholders' judgment on this tender offer matter" and added, "We will actively strive to enhance shareholder value going forward." MBK Partners initially announced its intention to make a tender offer on the 5th, offering to buy shares at 20,000 KRW per share, which was higher than the market price. They later raised the price once. They took an aggressive stance, citing judicial risks involving Cho Hyun-bum, the current largest shareholder and chairman of Korea & Company Group.

The tender offer failed. MBK initially set the minimum purchase volume at 20.35% and stated they would not buy if this threshold was not met. It is reported that only about 9%, less than half of the original plan, showed willingness to sell. Since Chairman Cho’s stake exceeded 40% and after the tender offer plan was announced, friendly parties such as Honorary Chairman Cho Yang-rae and Hyosung Advanced Materials purchased additional shares, MBK’s attempt failed. Cho Yang-rae’s eldest son and Chairman Cho’s brother, Cho Hyun-sik, an advisor at Korea & Company, along with other siblings, sided with MBK.

The company’s request for an investigation by the financial authorities is interpreted as a measure to prevent similar incidents from happening in the future. Although MBK’s tender offer failed this time, they have expressed intentions to improve governance, so similar incidents could recur at any time. However, the specific timing and institution for the investigation request have not yet been decided.

MBK Partners also requested an investigation by the Financial Supervisory Service regarding Honorary Chairman Cho Yang-rae’s share purchases, citing reasons such as market manipulation and violations of large shareholder reporting obligations.

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