EcoPro shares fall on founder's imprisonment

Lee Dong-chae, former chairman and founder of secondary battery materials producer EcoPro / Yonhap

By Yi Whan-woo

Shares of EcoPro, Korea's leading producer of secondary battery materials, and its subsidiary EcoPro BM, retreated on the tech-heavy Kosdaq, Friday, after the Supreme Court confirmed a prison term for their former chairman and founder Lee Dong-chae on the same day.

Industry sources said the fall in the stock prices of EcoPro and EcoPro BM shows how Korean businesses are keenly affected by risks associated with their leader or other symbolic figures.

EcoPro has been at the center of a recent surge in popularity of battery stocks and was regarded as a blue chip on the Kosdaq.

EcoPro lost 3.41 percent to close at 1.07 million won ($800), Friday, while EcoPro BM retreated 1.89 percent to close at 312,000 won.

The Supreme Court upheld rulings by lower courts and sentenced Lee to two years in jail for reaping 1.1 billion won in illicit gains through insider trading from 2020 to 2021.

Lee was also slapped with a 2.2 billion won fine and was told to return the money he made after being found guilty of breaching the law on capital markets.

The chairman stepped down in 2022 while appealing the court ruling.

Industry sources said the Supreme Court's decision could deal further blows to EcoPro and EcoPro BM on the stock market after they displayed robust performances until the latest ruling.

On Aug. 11, EcoPro joined a list of four new domestic companies on the Morgan Stanley Capital International Korea Index (MSCI). The three others were Hanwha Ocean, JYP Entertainment and Hanmi Semiconductor.

Operated by Morgan Stanley, the index tracks and measures the performances of large and mid-cap stocks and is widely followed by investors around the world.