South Korea’s Celltrion CEO to Be Probed in Stocks Trading Case

South Korea’s Celltrion CEO to Be Probed in Stocks Trading Case

South Korea’s financial regulator plans to ask prosecutors to investigate the chief executive officer of Celltrion Inc. over alleged stock price manipulation, the drug manufacturer said today. The Financial Services Commission is asking prosecutors to probe the actions of Celltrion’s largest shareholder, the company said in an e-mailed statement. Celltrion disagrees with the FSC’s decision and plans to cooperate with prosecutors, the company said. Celltrion’s largest shareholder is CEO Seo Jung Jin, spokesman Kim Joon Seok confirmed by phone.The FSC earlier said that the CEO of a Kosdaq-listed company manipulated the company’s share price three times since 2011 for fundraising and to prevent stock declines, identifying the company only with the letter “C.”

The decision comes after South Korean President Park Geun Hye instructed her aides in March to prepare stricter measures against stock manipulation, prompting financial regulators to submit bills to parliament to intensify penalties and enable quicker investigation of suspected market manipulation activity.

Shares (068270) of Celltrion rose the most in a month in Seoul, closing 5.6 percent higher at 46,150 won and paring this year’s loss to 12 percent. The Kosdaq index, where Celltrion is listed, has advanced 6.6 percent during the same period. The FSC issued its statement after the close of trading.

Celltrion last month issued a statement denying using internal information to make a profit, without specifying whether the statement referred to the company or Seo.

Incheon-based Celltrion makes and sells biosimilar products and also manufactures medicine on a contract basis, according to the company’s website. The company in June won European backing to sell a copy of Johnson & Johnson’s Remicade, a $6 billion arthritis therapy.

Temasek Holdings Pte, Singapore’s state-owned investment company, is the second-biggest shareholder of Celltrion with a 14.9 percent holding as of June via its Ion Investments BV unit, according to a Celltrion regulatory filing on July 1.

To contact the reporters on this story: Seonjin Cha in Seoul at scha2@bloomberg.net; Sharon Cho in Seoul at ccho28@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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