Suspicions have been raised that there was front-running during the tender offer process of Korea & Company, prompting financial authorities to review the related matters.
On the 6th, a Financial Supervisory Service official stated, "There are suspicions that 'front-running may have occurred' due to the trading volume increasing significantly more than usual before the Korea & Company tender offer, so we plan to look into the related aspects."
Earlier, MBK Partners announced on the 5th that, together with Cho Hyun-sik, advisor of Korea & Company and eldest son of Honorary Chairman Cho Yang-rae, they would conduct a tender offer for 20.35% to 27.32% of Korea & Company shares by the 24th. Following this disclosure, the stock price surged to the upper price limit and closed at 21,850 won, surpassing the tender offer target price of 20,000 won.
Subsequently, suspicions arose within the financial investment industry that "front-running occurred using undisclosed information." It was pointed out that Korea & Company’s stock price had already risen 30.1% from 12,840 won on the 20th of last month to 16,820 won the day before the tender offer announcement. Each time a trade was executed at the rising price, the trading volume also increased, suggesting the possibility that tender offer price information leaked before the disclosure.
Some also suspected that hy (formerly Korea Yakult), an existing shareholder of Korea & Company, may have purchased shares as a friendly stake for the Cho chairman’s side to lower the success rate of the tender offer.
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