Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Osstem Implant's trading suspension to continue following embezzlement
The Osstem Implant logo is seen at its headquarters in Seoul. Yonhap
By Lee Min-hyung
By Lee Min-hyung
The Korea Exchange said Monday it will delay making a decision on whether to uphold a trading suspension of Osstem Implant shares, after the firm was struck by a massive embezzlement scandal.
Starting from the beginning of 2022, shares of the scandal-tainted dental equipment manufacturer have been suspended from trading, after one of its employees allegedly embezzled 220 billion won ($184 million), the single largest embezzlement incident ever seen in Korea.
The exchange will announce its decision by Feb. 17 after reviewing the case further.
Depending on the exchange operator's upcoming decision, Osstem may have to submit its specific plans on how to improve its internal monitoring system within the next 15 trading days. The exchange will then send these plans to its corporate screening committee, which will make the final decision on whether to resume the trading of Osstem shares. In the worst-case scenario, Osstem Implant could be delisted from the secondary Kosdaq.
Although the situation depends on the upcoming decisions by the corporate screening committee and the KOSDAQ market committee, chances are that Osstem shares will be suspended from trading for more than two years.
This suspension will drive around 20,000 retail investors into frustration. As of the end of 2020, the number of Osstem's minority shareholders came in at 19,856, and they were holding more than 55 percent of the firm's shares.
Even if Osstem shares resume trading, its price will inevitably plunge in the aftermath of the embezzlement case. Early this month, police arrested the employee identified by his surname Lee on charges of embezzling corporate funds. As the police investigation is still underway, it will take more time for the exchange to make its final decision.
Police also said Monday that about 140 billion won out of the total amount of embezzled capital can be retrieved.
Last week, the exchange decided to delist drugmaker SillaJen from the secondary stock market, as its shares have been suspended from trading since May 2020, when its top management was indicted on charges of embezzling corporate funds and making undue profits.
Some argue that Osstem may end up following in the footsteps of SillaJen after being given a maximum of two years to improve its internal system. The exchange will then carry out a screening of the firm once again to determine whether to delist it from the local stock market.