[아시아타임즈=김지호 기자] ◆ Bio companies whose stock trading has been suspended, such as Osstem Implant and Shillajen, are on the verge of exiting the stock market.
According to Yonhap News on the 23rd, there are 260,000 minority shareholders in bio stocks, which are currently at the crossroads of delisting and have been suspended. They invested in ‘bio stocks’, which once caused a craze in the stock market, but their funds were tied up due to the suspension of trading, and they are moving to line up lawsuits.
On the 24th, the Korea Exchange will decide whether Osstem Implant is eligible for listing eligibility substantive examination.
However, if the exchange determines that additional investigation is necessary, there is a possibility that the decision on whether to be subject to review will be postponed to 15 business days.
Osstem Implant announced on the 3rd that it had filed a lawsuit against Mr. Lee, a money management employee, on charges of business embezzlement.
If Osstem Implant is determined to be eligible for listing, it is highly likely that the transaction suspension will be prolonged.
If a company submits an improvement plan within 15 days, the exchange reviews it within 20 days and hands it over to the Corporate Review Committee.
The corporate review committee (the judging committee) must decide one of three things: maintaining listing, delisting, and granting an improvement period (within 1 year). Trading resumes as soon as it is decided to ‘keep listing’, but if a decision is made to abolish it, it will be transferred to the KOSDAQ Market Committee for further deliberation for 20 days. If the improvement period is set, the transaction is further tied for up to one year.
In other words, according to the decision of the Corporate Review Committee and the second-instance KOSDAQ Market Committee, the suspension of trading may last for more than two years.
Therefore, the investment funds of Osstem Implant’s 20,000 minority shareholders, who are on the verge of retirement, will be tied up for this period.
As of the end of 2020, Osstem Implant’s minority shareholders amounted to 19,856. Minority shareholders account for 55.6% of the total issued stock of about 14.29 million shares, or 7.94 million shares.
If the exchange does not put it on the list of substantive review, trading will resume the day after the decision is made, but it seems inevitable that the stock price will fall. Currently, close to 2,000 minority shareholders are preparing to file a claim for compensation against the company.
Sillajen, which once led the myth of bio stocks, is raising concerns among investors as the exchange company review committee decided to delist it on the 18th.
The KOSDAQ Market Committee deliberates and decides whether to delist or grant an improvement period by the 18th of the next month. As of the end of 2020, there are 174,186 minority shareholders in ShillaJen, with a stake of 92.60%. Some of these shareholders have invested up to billions of dollars.
Sillajen, which was listed on the KOSDAQ market at the end of 2016, rose to the second place in market capitalization at one point as its stock price soared on expectations for a virus-based anticancer drug ‘Pexa-Vec’ despite the controversy over its overvaluation.
In particular, the stock price jumped 606% in 2017 alone, and individual investors started buying in large numbers during this period. ShillaJen’s minority shareholders increased from 30,000 at the end of 2016 to 118,000 at the end of 2017.
However, the stock price plunged on the news of the suspension of clinical trials in August 2019, and in May of the following year, due to embezzlement and misappropriation of management including former CEO Moon Eun-sang, a substantive review of listing eligibility occurred and the transaction was suspended.
In November of the same year, the company review committee granted a one-year improvement period. ShillaJen said that it has been making efforts to normalize, such as changing the largest shareholder during this period, but it is known that the exchange has determined that the improvement efforts are insufficient to keep the company as a company.
Some minority shareholders say they cannot accept the exchange’s decision and have even foreshadowed criminal prosecution against the CEO of the exchange.
Kolon TissueGene is about to make a final decision on whether to delist on the 9th of next month. Kolon TissueGene was placed on the subject of a listing eligibility substantive review due to the controversy over the ingredients of the new drug ‘Invossa K’ (Invossa), and stock trading has been suspended for nearly three years since May 2019.
The improvement period, which had already been granted twice in 2019 and 2020 by the KOSDAQ Market Committee, ended on the 17th of last month, and the final improvement plan implementation statement was submitted on the 7th.
The number of minority shareholders of Kolon TissueGene is 64,332 as of the end of 2020. Minority shareholders of Kolon TissueGene filed a claim for damages against the company and the securities company that hosted the listing in July 2019, and the trial is currently underway.
◆In relation to the Osstem Implant case, minority shareholders have started a class action lawsuit in earnest.
According to Yonhap News, Hannuri Law Firm, which is preparing a class action lawsuit on behalf of minority shareholders of Osstem Implant, submitted an application for preservation of evidence against Samduk Accounting Firm with the Seoul Central District Court on the 18th.
Samduk Accounting Firm was in charge of the external audit of Osstem Implant for fiscal year 2020, and in the Osstem Implant audit report in March last year, it said that there is no problem with the internal accounting management system and presented ‘appropriate’ as an audit opinion.
Law firm Hannuri said, “There was a problem with internal control that could not control or detect large-scale embezzlement, but we could not find this vulnerability, and the company and the accounting firm, which is an auditor, said (the internal accounting management system) was appropriate.” He said he was preparing a lawsuit.
Hannuri Han said, “Even if trading in Osstem Implant stocks, which has been suspended, is resumed, losses due to a sharp drop in stock prices are expected.” responsible,” he said.
“If the investigation of evidence is delayed, there is a risk of forgery, falsification, or destruction of the audit report held by the accounting firm,” he said.
Hannuri pointed out that there have been several cases in which accounting firms have attempted to delete or conceal audit reports in cases such as this case in which incomplete audit reports were a problem.
This case became known when Osstem Implant announced on the 3rd that it had sued the company’s money management employee, Mr.
The company announced on the 10th that Lee’s embezzlement amount was corrected from 188 billion won to 221.5 billion won, and it was confirmed that Lee had withdrawn 10 billion won and 23.5 billion won in the fourth quarter of 2021 and 2020, respectively.
In other words, the position of minority shareholders is that even though large-scale embezzlement had already occurred in the fourth quarter of 2020 and the internal control system was insufficient to the extent that the company could not control it, Samduk Accounting Corporation, an auditor of that year, failed to filter it out.
Hannuri said that as a result of recruiting Osstem Implant minority shareholders to participate in damage relief since the 6th, more than 1,700 minority shareholders have completed registration so far.
In addition, other law firms have joined, and it is known that there are close to 2,000 minority shareholders who are preparing a lawsuit against Osstem Implant.
◆ It was found that the court allowed up to 137.7 billion won in the amount that could be compensated for by confiscating and collecting the embezzlement money of a 54-year-old aunt who was arrested on charges of embezzling money from the Osstem Implant company.
According to Yonhap News on the 23rd, the Seoul Southern District Court set the upper limit for the amount of compensation for additional collections, citing the order to preserve the confiscation and additional collections before indictment recently applied by the police.
Preservation of confiscation and collection prior to prosecution is a freeze measure that prevents the suspect from arbitrarily disposing of the property acquired through the crime, even in the investigation stage before the prosecution’s indictment. If confiscation is not possible, the value is collected additionally.
According to the court order, the embezzlement money was frozen to prevent Lee from disposing of stocks and real estate at will, but the purpose is to preserve up to 137.7 billion won in case the real estate or stock price rises according to the market price.
It is known that the actual property preserved by the court decision is about 39.5 billion won, and 855 1kg gold bars (equivalent to 68.1 billion won) that Mr. Lee bought with embezzlement are managed as confiscated items.
Meanwhile, when the police applied for an order to preserve the confiscation and collection before prosecution, the police applied a special provision requiring the state to confiscate and collect additional money if it was difficult to recover the damage, considering that Lee’s embezzlement fell under the ‘Crime Damaged Property’ under the Corrupt Property Confiscation Act. confirmed to be
In general, fraud, embezzlement, and breach of trust are crimes with victims, and the state does not confiscate or collect the damaged property because it is the money that the victim should receive from the criminal.
However, if the special provisions of the Corrupt Property Confiscation Act are applied, confiscation or additional collection may be made in cases where it is deemed that it is extremely difficult for the victim to recover the damage, such as unable to exercise the right to claim the return of the property or the right to claim compensation, and the property is returned to the victim. .
Although the detailed logic of the court’s judgment is not known, the legal circle believes that even though Osstem Implant has a strong will to recover the embezzlement, it is difficult for a private company to fully understand Mr. Lee’s hidden property, which is personal information, so the court cited the order to preserve .
◆Mam’s Touch, a hamburger franchise, declared voluntarily delisting and started to buy stocks.
According to the Financial Supervisory Service on the 23rd, Mom’s Touch announced on the 20th that F&B Holdings Korea, the largest shareholder, would buy 16,087,172 common shares (15.80%) by the 15th of next month.
11,798,185 shares (11.59%) will be purchased by F&B Holdings Korea, and the remaining 4,288,987 shares (4.21%) will be purchased by Mom Touch.
If the tender offer is successful, the shares of F&B Holdings Korea and Mom’s Touch will become 79.08% and 20.02%, respectively. According to regulations, delisting is possible if the majority shareholder secures 95% or more of the listed stock.
Mom’s Touch jumped 17.88% to 6,130 won on the 20th. It set a new 52-week high at 6040 won during the day. Institutional investors made short-term investments in response to the tender offer decision, pushing up the stock price. The tender offer price is 6,200 won per share.
Mom’s Touch and Korea F&B Holdings plan to apply for delisting by withdrawing 100% of the shares of Susu shareholders.
Mom’s Touch entered the KOSDAQ market in 2016 by merging specifications rather than being listed directly. If delisting succeeds this time, it will return to an unlisted company for the first time in six years.
The largest shareholder was changed to F&B Korea Holdings in February 2020. The founder and former chairman Chung Hyun-sik acquired around 200 billion won in funds through the sale of his stake.
According to Yonhap News, inside and outside the KOSDAQ market, Mom’s Touch, who entered the stock market with difficulty, decided to voluntarily leave the stock market and was not looking at it.
It is said that this voluntary delisting decision is to avoid the interest and intervention of shareholders and franchisees, and the obligation to disclose transparent management information.
Mom’s Touch has recently been engulfed in a controversy over abuse of franchisees and has even sparked a boycott.
The Fair Trade Commission conducted an on-site investigation into Mom’s Touch, which is suspected of interfering with franchisee’s activities, and initiated sanctions procedures.
A tender offer is a process in which a prospective buyer purchases stocks held by minority shareholders after offering the purchase period, price, and quantity in order to strengthen management or control of a company.
However, if the participation of minority shareholders is low, the tender offer will be canceled, so it may be difficult to voluntarily delist. Investors who buy following stocks at high prices are likely to lose money.
◆The integrated fiscal balance, which shows the state of the country’s livelihood, has recorded a ‘double-digit’ deficit of more than 10 trillion won for four consecutive years from 2019 to this year under the Moon Jae-in administration.
This is the first time since 1970 when Korea began to draw up a consolidated fiscal balance.
This year, with the supplementary budget (additional budget) organized since January, the projected deficit of the consolidated fiscal balance has already reached 70 trillion won. If an additional budget is drawn up after the election, the deficit could reach 100 trillion won.
According to Yonhap News on the 23rd, citing ‘e-Nara Indicator’, ‘Open Finance’, a financial information disclosure system, and ‘Korea Integrated Fiscal Balance’ published last year by the Ministry of Strategy and Finance, the integrated fiscal balance, which was in surplus from 2016 to 2018, was It turned to a deficit of 12 trillion won in 2019.
In 2020, when the novel coronavirus infection (COVID-19) first hit, the deficit grew to 71.2 trillion won.
Although the tally for 2021 has not yet been completed, it posted a deficit of 22.4 trillion won until November. Based on the second supplementary budget, a deficit of 90.3 trillion won was expected, but the size of the deficit is expected to decrease as revenues increase than expected.
This year, the consolidated fiscal deficit was estimated at 54.1 trillion won from the main budget, and the forecast for this year’s supplementary budget was 68.1 trillion won, up 14 trillion won.
The consolidated fiscal balance is the balance obtained by deducting the net expenditure from the net income of the central government in the current year.
It covers general accounting, special accounting, and funds, but excludes internal transactions between accounting and funds, and maintenance transactions such as borrowing and repayment of debts in order to identify pure financial activities.
Korea introduced the integrated fiscal balance in 1979 following the recommendations of the International Monetary Fund (IMF), and has been retroactively prepared since 1970.
This is the first time that Korea’s consolidated fiscal balance has recorded a deficit of more than 10 trillion won for four years in a row since 1970, when it began compiling the consolidated fiscal balance.
From 1971 to 1986, the consolidated fiscal balance was in the red for 16 years, but most of the deficit was less than 1 trillion won, and even in 1982, when the deficit was the largest, it was around 2.2 trillion won.
Even in 1997~1999, when the Korean economy was in turmoil due to the International Monetary Fund (IMF) foreign exchange crisis, the consolidated fiscal balance was in the red, but the period was shorter than this time for three consecutive years.
The deficit was 6.9 trillion won in 1997, 18.8 trillion won in 1998, and 13.1 trillion won in 1999, which was relatively smaller than the last four years, which was 12 to 71 trillion won.
In the end, it means that in recent years, due to factors such as responding to the COVID-19 crisis, the country has managed to manage the country by dealing with an unprecedentedly large-scale deficit that is larger than during the IMF crisis.
However, considering the rapid growth of Korea’s economy, it is also necessary to examine the proportion of the integrated fiscal deficit in gross domestic product (GDP).
The ratio of the consolidated fiscal deficit to GDP has in the past been similar to or higher than the current level.
The ratio of the consolidated fiscal deficit over the past four years is 0.6% in 2019, 3.7% in 2020, 4.4% in 2021 (based on the second supplementary budget), and 3.2% this year (based on the supplementary budget).
In 1998, the ratio of the consolidated fiscal deficit reached 3.5%, and in 1981 (4.3%), 1975 (4.4%), and 1972 (4.5%) exceeded the 4% level.
Meanwhile, the managed fiscal balance minus the social security funds such as the National Pension and Employment Insurance from the integrated fiscal balance has been in the red for 15 consecutive years since 2008.
After the COVID-19 crisis, the deficit will fall to 112 trillion won in 2020, 126 trillion won in 2021 (based on the second supplementary budget), and 108.2 trillion won in 2022 (based on the second supplementary budget), resulting in a deficit of more than 100 trillion won.
The size of the consolidated fiscal deficit this year is currently expected to be around 68 trillion won, but depending on the circumstances, it could exceed 71.2 trillion won in 2020, the first year of COVID-19 and the largest deficit ever recorded.
The supplementary budget has already been formed since January, and the National Assembly is discussing increasing the amount of the supplementary budget submitted by the government from 14 trillion won to 35 trillion won.
While total revenue remains the same, if the amount of total expenditure increases, the extent of the deficit will inevitably increase by that much.
In addition, after the March presidential election, it is highly likely that a large-scale supplementary budget will be formed to reflect the new president’s state management philosophy in the budget.
If expenditure increases by more than 30 trillion won due to the expansion of this supplementary budget or the additional supplementary budget after the presidential election, the consolidated fiscal deficit this year is expected to approach 100 trillion won.
◆The National Statistical Office has decided to start investigating virtual assets such as Bitcoin that households hold from this year. Accordingly, the size of virtual assets held by households is expected to be identified.
The National Statistical Office announced on the 23rd that it will add virtual assets as a new investigation item to the household financial welfare survey conducted jointly with the Bank of Korea and the Financial Supervisory Service from this year.
The Household Financial Welfare Survey is conducted to understand financial soundness through household assets, liabilities, income, and expenses, and to understand the level and change of economic life.
As of the end of March every year, it is held for about 20,000 sample households across the country.
The National Statistical Office has been preparing for this investigation considering that the need for an investigation on virtual assets continues to be raised internationally and that taxation on virtual assets was originally scheduled to be implemented this year.
According to the National Assembly discussion, the taxation period for virtual assets was delayed by one year to 2023, but the National Statistical Office decided to proceed with the investigation as scheduled to secure data.
The National Statistical Office defined virtual assets as ‘virtual assets traded through exchanges’.
We plan to ask respondents whether they have virtual assets traded through exchanges, and ask respondents who answered that they have them to write down the value of their virtual assets as of the end of March.
The National Statistical Office has not yet decided whether virtual assets will be included in financial assets such as savings, stocks and bonds or real assets such as real estate and automobiles. As a result, the date of the announcement of the statistics has yet to be determined.
◆[부고] Mother-in-law of Bae Young-gyu (Executive Director, Korea Investment & Securities)
▲ Lim Jeong-soon passed away, Lee Hak-seung, Lee Il-seung, Lee Woo-seung, Lee Jeom-suk, Lee Nam-sook, Lee Young-sook, and Lee Soon-suk’s mothers, Park Jong-kyung and Bae Young-gyu (Executive Director, Korea Investment & Securities IB Group)’s mother-in-law, Oh Hae-ja and Kim Myung-ran’s mother-in-law Award = 22nd at 9pm , Seongnam Mayor’s Ceremony Room 4, 6:00 a.m. on the 25th. ☎ 031-752-0404 (Seoul = Yonhap News)
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