Osstem Implant, which is listed on the KOSDAQ as Korea’s No. 1 implant manufacturer, is on the verge of exiting the stock market due to an employee’s all-time embezzlement. The embezzlement case is a constant ailment for KOSDAQ listed companies, and this time too, investors are paying attention to whether or not to delist due to the high possibility of loss for investors.
According to the Korea Exchange on the 4th, Osstem Implant announced the day before that an employee embezzled 188 billion won of company money, causing a substantive review of listing eligibility.
The substantive examination of eligibility for listing is a process of examining the suitability of a company that is considered to fall short of the listing standards of the exchange in terms of quality. If allegations such as embezzlement of a significant scale are confirmed through public disclosure, an examination will be conducted.
The amount of money embezzled by Mr. Lee, an employee of Osstem Implant, is a large amount equivalent to 91.81% of the company’s equity capital (204.8 billion won). The exchange will decide whether Osstem Implant is eligible for listing eligibility substantive examination by the 24th. If the need for additional investigation is recognized, the period within 15 business days will be extended, and at the latest, the subject will be decided around the middle of next month.
If it is subject to substantive examination, it will go through a substantive examination for 20 to 35 business days before being brought up to the Corporate Review Committee, where it is decided whether or not to delist. However, considering the period for deliberation, resolution and improvement by the KOSDAQ Market Committee, and objections raised by listed companies, the suspension of trading may be prolonged for a considerable period of time.
There are mixed views as to whether Osstem Implant will undergo a substantive examination for listing eligibility. Looking at KOSDAQ-listed companies in a similar situation in the past, Toptech was accused of embezzlement and breach of trust in December 2018, but was excluded from the substantive examination for listing eligibility. At that time, Toptech had a market cap of 280 billion won and was included in the KOSDAQ 150 index.
Even if Osstem Implant is subject to the substantive examination for listing eligibility, it is uncertain whether it will actually lead to delisting, considering the size of the market cap. Osstem Implant’s market capitalization just before the suspension of trading stood at 2.386 trillion won, ranking among the top 20 in the KOSDAQ market. Also, in reality, it is expected that the recovery of the embezzled funds will act as an important factor in whether or not the listing will be delisted.
An exchange official said, “How much the embezzlement will interfere with the company’s normal business activities and how much the embezzled amount will be recovered will be important factors in determining whether the company will remain listed or not. things will be considered,” he explained.
If the recovery of funds fails, some analysts say that delisting is inevitable when considering the amount of embezzlement compared to equity capital. Right now, Osstem Implant is showing that it is possible to recover the funds.
A source from Osstem Implant said, “We know that the employee’s account is frozen, so we expect to be able to recover most of the stolen funds. “We will do everything possible to recover the funds,” he said.
The employee accused of embezzlement is believed to be a ‘super ant’ born in 1977 in Paju, Gyeonggi-do, who suffered a loss by buying and selling a large amount of Dongjin Semichem’s stock last year. Mr. Lee bought 3.91 million shares of Dongjin Semichem for 143 billion won and sold 3.36 million shares. The sale amount was 111.2 billion won.
As of the 30th of last month, Lee had 550,000 shares of Dongjin Semichem, and as of the closing price of the day, the share price of Dongjin Semichem was 45,900 won. Considering the stock price and the stock price, Mr. Lee is estimated to have suffered a loss.
Osstem Implant shareholders are paying attention to whether the listing will be delisted, with reactions such as ‘I put in my severance pay, but I’m tied to Osstem Implant and I can’t even eat rice’
Seo Geun-hee, a researcher at Samsung Securities, said, “As the amount of embezzlement is large compared to equity, it is expected that the substantive examination will be decided depending on the possibility of recovering the funds. Considering the company’s permanence and investor protection, the possibility of delisting is low.”
[ⓒ 세계일보 & Segye.com, 무단전재 및 재배포 금지]
Source: 경제 by www.segye.com.
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