FSS Operates Crackdown Team on 'Funding Market Tightening Rumors'
Lotte Capital Also Announces Legal Response
[Asia Economy Reporter Kwon Jae-hee] Recently, amid tightening liquidity in the financial market and rumors of bankruptcies involving securities firms and construction companies, the Financial Supervisory Service (FSS) has launched a joint crackdown team. In response, Daol Investment & Securities has taken a strong stance by directly reporting to the FSS.
On the 20th, Daol Investment & Securities announced that it had filed reports with the FSS Securities Unfair Trade Reporting Center and the Investigation Planning Bureau.
The previous day, through information sheets (Jirasi), rumors spread like wildfire about the bankruptcy of construction companies due to the default impact of Legoland in Gangwon-do, as well as sale rumors involving Daol Investment & Securities and some other securities firms.
A representative of Daol Investment & Securities said, "Although we initially intended not to respond to the absurd content of the Jirasi, we recognized the seriousness of the matter as it adversely affected the company's image and stock price, and decided to take a strong stance. We have directly reported the issue to the FSS."
On the same day, Daol Investment & Securities’ stock price closed at 3,195 won, down 9.10%.
Daol Investment & Securities also explained that although it is true that the real estate market is sluggish due to interest rate hikes, the company is not vulnerable enough to put itself up for sale, as it has secured risk management and sufficient liquidity.
Lotte Capital also denied rumors about its liquidity crisis and announced plans for legal action.
Lotte Capital stated that rumors spread the previous day claiming the company failed to absorb commercial paper despite high interest rates are groundless. It added that it is considering strong legal measures against the malicious dissemination of false information.
As of the end of September, Lotte Capital has cash assets of 1.728 trillion won and is capable of repaying most of the 1.88 trillion won in corporate bonds maturing next year without new financing or asset recovery.
Meanwhile, the FSS announced that it will operate a joint rumor crackdown team in cooperation with the Korea Exchange and others to conduct focused monitoring. In particular, it will crack down on acts of spreading false rumors involving specific companies by name, liquidity crisis rumors, bankruptcy and sale rumors, as well as false rumor dissemination related to corporate bonds and asset-backed commercial paper (ABCP) markets.
The FSS’s strong response comes as recent domestic and international uncertainties have unsettled the financial market, and rumors of financial institutions facing liquidity difficulties have circulated through Jirasi, causing significant shocks to the funding market.
An FSS official said, "We will strictly take action against those who deliberately spread rumors for personal gain by exploiting the sense of crisis," adding, "If market disruption or fraudulent unfair trade using malicious rumors is detected, we will promptly refer the case to investigative authorities."
The FSS also urged investors to refrain from 'blind investments' based on Jirasi and to immediately report any discovery of malicious rumors or false information dissemination.
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