TYM shares plunge on alleged stock market manipulation, accounting fraud

TYM CEO Kim Do-hoon / Courtesy of TYM

TYM, which competes with Daedong and LS Mtron in the Korean agricultural equipment market, saw a 23.21 percent decline in its stock price, Monday, after a news report that its CEO is under prosecutorial investigation and that the financial watchdog is set to sanction the company.

Kim Do-hoon, the TYM CEO who joined the company in 2020 as the chief financial officer, is said to be under investigation, following an accusation made three years ago regarding alleged stock market manipulation.

There are rumors that the accusation was made by a company insider amid an ongoing conflict between the CEO and the largest shareholder, Vice President Kim Shik. Kim Shik, who is the second-oldest son of Chairman Kim Hi-yong, was arrested last year on allegations of drug use.

“We do not know details about the investigation into the CEO, as the accusation was made against the individual, not against the company,” a TYM spokesman said.

The agricultural equipment maker is also at risk of facing penalties from the financial authorities.

The Financial Supervisory Service (FSS) recently inspected the company to find out whether it had exaggerated its revenue in 2022 by forcing local dealerships to buy machines equipped with Tier 4 engines.

The sale of those products was banned after a stricter environmental regulation took effect in June 2022, but dealerships were allowed to sell their inventories even after its prohibition.

TYM is suspected of having forced its dealerships to buy its remaining machines that were equipped with Tier 4 engines, which are collectively worth 64 billion won ($46 million).

“It is difficult to comment on the FSS inspections at this moment,” the TYM spokesman said.

The FSS sent the case to the Financial Services Commission (FSC).

Once the summer vacation period is over, the FSC is expected to convene the commissioners of the Securities and Futures Committee to decide the level of sanctions needed.

During the COVID-19 pandemic, TYM was nicknamed by retail investors here as “Tesla of the agricultural sector” because its stock price soared rapidly thanks to the growing demand for its compact tractors in North America amid the popularity of hobby farming.

In 2023, the company gained attention once again, as the presidential office disclosed the photo of President Yoon Suk Yeol driving TYM’s autonomous rice planting machine on a rice paddy in Buyeo County, South Chungcheong Province.