[헬스코리아뉴스 / 정민우] The stock price of Shinpoong Pharmaceutical, which is developing ‘Piramax’, an oral treatment for COVID-19, is on a roller coaster. The stock price, which had fallen for the second day, is rebounding on the news that the police are being investigated for embezzlement of slush funds.
On the KOSPI on the 26th, Shinpoong Pharmaceutical’s share price was trading at 34,950 won as of 11 am, up 3,600 won (11.48%) from the previous day. When the share price of Shinpoong Pharmaceutical, which was over 200,000 won in December last year, reached 30,000 won, it seems that investors started to buy it.
To make a delisting decision, comprehensively look at performance, financial situation, and company continuity.
Executives’ embezzlement and breach of trust are serious issues that the Korea Exchange can review for delisting the company. However, considering the past cases, delisting is not easily accomplished, which is also analyzed as a factor in the purchase. In addition, it was a bet that the stock price could rise based on the expectation of Pyramax’s Phase 3 result.
A pharmaceutical and bioanalyst, who requested anonymity, told Health Korea News on the 26th, “The exchange decides whether to delist or not, taking into consideration corporate continuity, management transparency, and other public interests and investor protection.” Even if it does, it will not immediately lead to delisting.”
An official from the Korea Exchange also said, “If a person is subject to a listing substantive examination, the judgment will be made by comprehensively examining the performance and financial situation, rather than simply considering whether the allegations are proven or the amount of damage.”
However, if embezzlement or breach of trust is confirmed, trading may be suspended at the discretion of the exchange. If the embezzlement or breach of trust of a listed company is confirmed through public disclosure, the Exchange suspends trading in the relevant stock and determines whether it falls under the substantive examination of listing eligibility. In this process, if the amount of embezzlement or breach of trust exceeds 5% of equity capital and 2.5% or more in the case of a large company, it is included in the substantive examination for listing eligibility.
Shinpoong Pharmaceutical is said to be under suspicion of raising a slush fund of 25 billion won. As of the end of September this year, Shinpoong Pharmaceutical’s equity capital stood at 362.6 billion won. If the charge of embezzlement of 25 billion won is found, it is 6.8% of equity capital. In this case, depending on the progress of the police investigation, there is a possibility that the transaction will be suspended and the delisting review will begin.
Shareholders are of the view that the company should offer a promise to prevent recurrence and intensive improvement plans. One shareholder even proposed a reduction in capital and a reduction in cash payment to shareholders of the reduced amount.
This year alone, 52 companies accused of embezzlement and breach of trust … Shillajen also exempted from delisting of 194.7 billion
According to the Korea Exchange, by the beginning of November this year, there were 52 cases of alleged embezzlement and breach of trust by listed companies. Last August, the machinery company DSTwas delisted as a result of its management embezzling KRW 22.4 billion (68% of its equity capital). digital set-top box ArionThe transaction was suspended on suspicion of embezzlement and breach of trust worth 38.2 billion won.
However, new drug developers ShillajenAlthough the former management’s embezzlement amounted to 194.7 billion won, which amounted to 344.20% of its equity capital, the listing was maintained. The change of the largest shareholder and the promise of management improvement received positive evaluations.
Kolon TissueGene It was also revealed that an executive was charged with embezzlement and breach of 2.7 billion won, but was given a period for improvement. The final decision on whether to delist or not depends on the improvement results.
In addition, the past manikerWow Bohae Brewingwas accused of embezzlement and breach of trust worth 23.8 billion won and 50.9 billion won, respectively, but was spared from delisting. DMCAt the time, the CEO was accused of embezzling 74.7 billion won, 112.36% of the equity capital, but a period for improvement was granted.
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