Our Employee Stock Ownership Faces Forced Sale Risk... Jang Byung-kyu, Chairman of Krafton, Says "I Feel a Heavy Responsibility"

As of the closing price on the 25th, Krafton fell 41.57% compared to the IPO price
Krafton provides additional collateral by depositing new cash deposits... specific scale not disclosed

[Asia Economy Reporter Gong Byung-sun] As the stock price fell and employees holding KRAFTON employee stock ownership plans (ESOP) faced the risk of forced liquidation, KRAFTON Chairman Jang Byung-gyu felt a heavy sense of responsibility and took steps to protect the members.

On the 25th, Chairman Jang stated on KRAFTON's internal bulletin board, "Participation in the ESOP is an individual decision, so neither I nor the company can take unlimited responsibility," but added, "I hope you make money through the ESOP, and above all, as a member of the management team, I feel a heavy sense of responsibility." He also mentioned that underwhelming performance and a global liquidity contraction seemed to have influenced the stock price decline.

On the same day, KRAFTON recorded a closing price of 291,000 KRW, down 41.57% from the initial public offering (IPO) price. This marked the first time since listing that the stock price fell into the 200,000 KRW range. The ESOP valuation per person based on the closing price dropped to 76.82 million KRW. The loss per person compared to the IPO price reached 54.65 million KRW.

The possibility of forced liquidation also increased. KRAFTON employees who took out loans through Korea Securities Finance Corporation to acquire ESOP shares are subject to forced sale of stocks if the collateral ratio is not maintained due to the stock price decline, according to the loan terms.

On the same day, Chairman Jang did not present specific measures on the internal bulletin board. However, as the stock price further declined, the company took action. KRAFTON announced in the afternoon, "The company has decided to deposit new collateral to provide additional security for members who took loans through Korea Securities Finance Corporation to acquire ESOP shares," adding, "This is to protect members who invested with a view to the company's long-term future value." However, the company did not disclose the specific amount of additional collateral provided.