Celltrion stocks plunge on ‘CEO risk’
February 6, 2014 Leave a comment
2014-02-05 16:34
Celltrion stocks plunge on ‘CEO risk’
By Kim Tae-jong
Stocks of Celltrion dropped by 6.14 percent Wednesday following news that its CEO has been banned from overseas travel and the prosecution will soon summon him for questioning over alleged stock price manipulation.
Celltrion is the largest firm on the tech-laden KOSDAQ bourse in terms of market capitalization, which stood at 4.07 trillion won as of Feb. 5.
It lost 2,650 won per share to end trading at 40,500 won, Tuesday, while the KOSDAQ dropped by 0.38 percent to close at 505.62.
The investigation into stock price rigging at Celltrion began in October after the Securities and Futures Commission filed a complaint against Chairman and CEO Seo Jung-jin for fraudulent equity trading.
The prosecution has already summoned officials from the firm and recently imposed a travel ban on the biopharmaceutical firm’s CEO and other executives.
“We have just started to summon relevant employees,” a prosecutor said, declining to comment further on the ongoing probe.
The prosecution has been very careful with its investigation, given the effect it could have on the KOSDAQ bourse.
It suspects that Seo manipulated the firm’s stock prices three times by using funds from Celltrion and its subsidiaries between 2011 and last year. He is also suspected to have used insider information.
Celltrion has continued to deny the allegations over the past few months.
Seo has defended himself by saying that he bought the firm’s stock in order to protect it from speculative short-selling.
He argued that the firm had been under attack from investors who deliberately distorted prices by spreading false information and gained profits through short-selling.
In April last year, before the probe began, Seo even said that he would sell his entire controlling stake in the firm to a multinational pharmaceutical company as he was tired of short-selling by speculative investors, also criticizing the lack of protection from the financial authorities.
Upon the announcement, the stock of the firm plunged to the lowest level of 25,914 won on April 22, but gradually gained to hit its highest, 66,706 won, during trading hours on Aug. 6. It has since moved around 40,000 won.
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