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(Yonhap News) |
Korea Exchange, the country’s bourse operator, announced on Sunday it has normalized the trading of Hanwha Corp. shares after deciding not to subject the company to a delisting review in connection with the ongoing probe into alleged embezzlement.
The move will allow the stock to be traded without any restriction on Monday, but investors are likely to see a turbulent ride due to the nature of the problem plaguing the holding firm of Hanwha Group, one of the country’s major conglomerates.
Hanwha shares had been suspended since late Friday due to its violation of the public disclosure rule on the prosecutors’ investigation into the case involving Hanwha Group chairman Kim Seung-youn.
In an apparent bid to minimize its impact on the share price, Hanwha issued a public disclosure at 6:46 p.m. on Friday after the stock market closed, revealing that its executives, including Kim, are suspected of misappropriating 89.9 billion won ($80.4 million) of the company’s funds. The amount translated into 3.88 percent of its paid-in capital, and Hanwha was supposed to make public the development earlier due to the KRX regulations.
KRX said Hanwha stock was suspended immediately when the announcement was made Friday evening, though the impact was virtually none as the market had already closed down.
Speculation mounted Sunday morning over whether KRX would move the case to a formal delisting review and keep suspending the trade of the stock, a scenario that would hit Hanwha investors. The bourse operator, however, held a quick preliminary review meeting on the Hanwha case and decided not to send it to the delisting review session.
“We decided not to put Hanwha on review for a possible delisting because its plan to boost managerial transparency was found to be workable,” said Cho Jae-doo, executive director of KRX, at a news conference held at noon on Sunday when the meeting was over. “The decision was made to stabilize the market and protect investors.”
On Friday, the prosecution sought a nine-year prison term for Hanwha Group’s chief Kim Seung-youn for misappropriation of company funds to pay for debts of other firms he ran under borrowed names. Prosecutors claimed that Kim and 10 other officials are suspected of causing a total of 640 billion won in damage to Hanwha and its affiliates.
Hanwha, which denied all the charges, issued a statement on Sunday offering an apology to investors and expressing its regret over the incident. “The public notice was about the one-sided indictment by the prosecutors filed on Jan. 29, 2011, and all the defendants are denying all the charges and there is no final court ruling yet,” Hanwha Corp. CEO Nam Young-sun said in the statement. The first court ruling on the case is slated for Feb. 23.
Shares of Hanwha, whose market capitalization stands at 2.9 trillion won on the KOSPI, ended up at 38,800 won on Friday.
By Yang Sung-jin (
insight@heraldcorp.com)
