Financial watchdog probes into Gamevil, CJ E&M’s information leakage

November 1, 2013 Leave a comment

Financial watchdog probes into Gamevil, CJ E&M’s information leakage

Hwang Ji-hye, Oh Soo-hyun

2013.10.31 14:47:48

The Financial Supervisory Service (FSS) launched an investigation on suspicions that information about Gamevil’s rights offering and CJ E&M’s third quarter (Q3) earnings was leaked prior to the release of such information to the public. Allegedly, the confidential information was delivered only to certain institutions so that some groups exploited it to make profits. The FSS ordered institutions including asset management firms to hand in the letter of explanation over sales of Gamevil shares this month, according to sources in the financial and investment industry Wednesday. This came amid allegations that some institutional investors obtained confidential information on June 12 before Gamevil announced its public offering plan, avoiding losses from share price declines.
On the day, institutions unloaded 233,200 shares, the largest ever since Gamevil was listed, driving down the share price to the daily price limit. Information leaked by Gamevil to analysts flowed into institutions, the FSS suspected.
The FSS also sent a notice to 22 industrial officials including brokerage firms’ analysts this week, calling for their cooperation over the investigation into CJ E&M’s information leakage. CJ E&M is alleged to have offered information for analysts that its Q3 earnings fall short of half of market expectations before the market opens on October 16.
Some of the analysts who obtained earnings information provided it to institutional investors, helping them to sell CJ E&M, market analysts expected.
The CJ E&M case has been assigned to the new division which was created after President Park Geun-hye ordered officials to devise measures to fight stock price manipulation. This reflects the seriousness of the problem that information leakage is eroding trust in the capital market.

Filed under Investing Process, Macro Trends

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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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