[At a Crossroads: Listed Companies] Osteem Implant Chairman Choi Kyu-ok, Difficult to Extend 110 Billion Won Stock-Backed Loan Maturity②

[Asia Economy Reporter Jang Hyowon] As Ostem Implant, which experienced the largest embezzlement case in the history of listed companies, has been suspended from trading, it is expected that Choi Kyuok, Chairman of Ostem Implant (photo), will also find it difficult to extend his stock-backed loan worth 110 billion KRW.

Choi Kyu-ok, Chairman of Osstem Implant.

According to the financial investment industry on the 5th, as of the 23rd of last month, Chairman Choi Kyuok received a loan of 110 billion KRW by pledging 1,758,708 shares (12.3%) out of his 2,943,718 shares (20.6%) of Ostem Implant stock. He provided more than half of his holdings as collateral.

The maturity of this loan will come due as early as February. The earliest maturity date is 10 billion KRW borrowed from Kyobo Securities, due on February 14. Subsequently, loan maturities will continue sequentially until December.

The largest lender is Korea Securities Finance Corporation, which lent 25 billion KRW. Following are Hyundai Motor Securities (20 billion KRW), Korea Investment & Securities (12 billion KRW), Kyobo Securities (10 billion KRW), Hana Financial Investment (10 billion KRW), SK Securities (5 billion KRW), Daishin Securities (5 billion KRW), Eugene Investment & Securities (5 billion KRW), Hi Investment & Securities (5 billion KRW), KB Securities (3 billion KRW), NH Investment & Securities (3 billion KRW), and Samsung Securities (2 billion KRW).

Earlier, Ostem Implant announced on the 3rd that an embezzlement case amounting to 188 billion KRW, equivalent to 91.8% of its equity capital, had occurred. Accordingly, the Korea Exchange has suspended trading of Ostem Implant shares and is reviewing whether to subject the company to a delisting suitability examination. The securities industry believes that due to the large scale of the embezzlement case, it will be difficult for Chairman Choi Kyuok to extend the maturity of his stock-backed loan. Most securities firms do not extend loan maturities if the collateral stocks are suspended from trading, according to their internal regulations.

An official from a securities firm said, "If the collateral stocks are suspended from trading, loan extension is impossible. If the debtor cannot provide other collateral, repayment will be required." Accordingly, there is speculation that Chairman Choi may liquidate his assets. In particular, since taking out the stock-backed loan, Chairman Choi has personally purchased shares of several listed companies until recently.

First, APS Holdings is one of the companies whose shares Chairman Choi has steadily purchased on the market. As of the 10th of last month, Chairman Choi personally holds 1,258,039 shares (6.17%) of APS Holdings. Based on the market price on that day, this is worth approximately 17.8 billion KRW.

Chairman Choi also invested in Hans Biomed. Since March of last year, he has secured 187,000 shares through market purchases. The current value is about 2 billion KRW based on the market price on that day.