Expectations to Monitor Pexavex Phase II Clinical Results in Various Cancer Types and Business Normalization
On the afternoon of July 31, minority shareholders of SillaJen held a press conference in front of the Blue House fountain, urging the resumption of SillaJen trading. [Image source=Yonhap News]
[Asia Economy Reporter Minwoo Lee] SillaJen has temporarily avoided delisting. The Korea Exchange has decided to grant a one-year improvement period to monitor the normalization of management.
The Korea Exchange’s Corporate Evaluation Committee (CEC) announced on the 30th that after reviewing SillaJen’s eligibility for listing, it has made a final decision to grant an additional one-year improvement period. Previously, in August, the CEC reviewed SillaJen’s delisting but was unable to reach a conclusion.
The Exchange stated, "SillaJen must submit a report on the implementation of the improvement plan and an expert’s verification of the results within 7 business days from the end of the improvement period (November 30, 2021). The Exchange will hold a CEC meeting within 15 business days from the date of receiving these documents to review and decide on the delisting status."
This decision was made after comprehensively considering that SillaJen’s pipeline, Pexa-Vec, failed in liver cancer clinical trials but is still undergoing trials in other cancer types, and that management transparency is expected to improve through changes in the executive team. In September, SillaJen held an extraordinary general meeting of shareholders and appointed Joo Sang-eun as the new CEO, making efforts toward management normalization.
Although the company has temporarily escaped delisting, small shareholders of SillaJen still cannot trade their shares. The trading suspension will continue until the final decision on whether to maintain the listing or proceed with delisting is made. If the CEC decides to maintain the listing after the improvement period, trading can resume the next day. If delisting is decided, the conclusion of the Korea Exchange’s KOSDAQ Market Committee must be awaited. According to the Q3 quarterly report, as of July 16, there are a total of 165,694 small shareholders holding 93.44% of the shares.
Earlier, SillaJen triggered a cause for a substantive review of listing eligibility in May after former CEO Moon Eun-sang and other former executives were arrested and indicted on charges of embezzlement and breach of trust. Since then, trading of SillaJen’s shares has been suspended. At the end of the same month, the Seoul Southern District Prosecutors’ Office indicted five individuals, including former CEO Moon, on charges including violations of the Capital Markets Act. They are accused of acquiring 35 billion KRW worth of bonds with warrants (BW) in a circular manner without actual funds in March 2014, gaining unfair profits of 191.8 billion KRW, among other charges.
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