Hanwha slapped with one-day trading suspension

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Hanwha slapped with one-day trading suspension

Trading on stocks of Hanwha, the flagship company of Korea’s 10th-largest conglomerate Hanwha Group, will be suspended for a single day today as the nation’s sole bourse operator penalized the company for issuing a notification “in bad faith.”

Korea Exchange ruled that Hanwha had acted in bad faith. Under its regulations, this automatically results in the suspension of trading in the company’s stocks in the following session. Hanwha will also be fined 7 million won ($6,200).

Over three hours after the market closed on Friday, Feb. 3, the company notified investors of the embezzlement charges against Kim Seung-youn, the chairman of Hanwha Group, even though prosecutors originally raised the charges more than one year earlier. This action could have resulted in it being delisted from the stock market two days later, but the KRX chose not to go down this path. However, it did impose seven penalty points on Hanwha yesterday, one more than it initially threatened to apply. Five points is the threshold at which a one-day suspension of trading must be activated. Any company that receives 15 penalty points within a two-year period is placed on an “investor watchlist,” while another 15 in the subsequent two years merits a delisting review, according to regulations. Shares of Hanwha finished down 0.68 percent yesterday at 36,850 won.

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