FSS to Investigate Potential Insider Trading Before Korean & Company Tender Offer

The Financial Supervisory Service (FSS) is examining whether there was any front-running during the tender offer process of Korea & Company.

An FSS official stated on the 6th, "The trading volume increased significantly before the Korea & Company tender offer," adding, "We plan to investigate which accounts made purchases and whether there are any issues."

Earlier, on the 5th, MBK Partners conducted a tender offer for 20.35% to 27.32% of Korea & Company shares held by Cho Hyun-sik, the eldest son of Honorary Chairman Cho Yang-rae, until the 24th. This marks the recurrence of the 'brothers' conflict' within Korea Tire after about two years.

Following the tender offer announcement, the stock price surged to the upper price limit, closing at 21,850 KRW, surpassing the tender offer target price of 20,000 KRW.

However, in the financial investment industry, suspicions have been raised that front-running occurred using undisclosed information, as Korea & Company’s stock price had already risen 30.1% from 12,840 KRW on the 20th of last month to 16,820 KRW on the 4th, the day before the tender offer announcement. The fact that trading volume increased alongside each transaction at the rising prices suggests the possibility that tender offer price information leaked before the official announcement.

The FSS plans to focus on suspicious accounts and then decide whether to proceed with a formal investigation.