[Asia Economy Reporter Jang Hyowon] It has been revealed that a large volume of shares was released into the market after the stock transfer agreement of Paratech, a KOSDAQ-listed company, was terminated. Industry insiders estimate that the large volume was dumped by BaseHD, the former largest shareholder of Paratech.
BaseHD was embroiled in controversy over non-fulfillment of the contract as it failed to repay the money borrowed from Paratech by the payment deadline after signing the stock transfer agreement.
According to the Financial Supervisory Service’s electronic disclosure on the 9th, BaseHD announced the cancellation of the stock transfer agreement with NSE&G the day before. BaseHD had already transferred management rights and 3,086,707 shares to NSE&G. The volume announced for cancellation this time is the remaining 2,466,485 shares.
Looking at Paratech’s trading trends the day before, other corporations recorded a net sale of 1,717,204 shares. This accounts for about 10% of Paratech’s total shares. It is unusual for such a large volume to be dumped at once by other corporations. Over the past year, days when other corporations traded more than 100,000 shares in Paratech are very rare.
Therefore, the market estimates that this volume was dumped by BaseHD. According to the report at the end of the third quarter last year, the shareholders holding more than 5% of Paratech’s shares were only BaseHD and Camu E&C. Since Camu E&C disposed of most of its Paratech shares at the end of last year, BaseHD is understood to be the only shareholder who can dump more than 10% of shares into the market currently.
The closing price of Paratech the day before was 12,850 KRW. The price per share that BaseHD contracted with NSE&G was 7,600 KRW. The stock price rose due to the M&A issue. If BaseHD sold the shares canceled with NSE&G at the previous day’s closing price, it would have gained an additional profit of about 69%.
On the other hand, general investors experienced a stock price decline. The price dropped as much as -10% during the session amid strong selling pressure. As of 10 a.m. that day, it was still down sharply by 11% compared to the previous day.
Previously, in October last year, BaseHD and NSE&G signed a contract to transfer 5,553,192 shares of Paratech at 7,600 KRW per share, totaling 42.2 billion KRW.
After NSE&G paid the deposit and interim payment and received management rights, BaseHD did not fulfill its contractual obligations, such as repaying the amount borrowed from Paratech. Eventually, with only the remaining balance left, BaseHD canceled the contract, causing controversy.
Inquiries to BaseHD regarding this matter went unanswered.
Meanwhile, BaseHD has affiliates including KOSPI-listed companies Camu E&C, Myeongdong AMC, Taeheung Industry, Hunid, Geumyang International, and Korea Aluminum.
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