Surge in Doosan shares probedThe stock exchange is investigating transactions involving Doosan Group shares due to abrupt surges in prices before the group’s announcement of a new chairman.
The Korea Exchange Market Oversight Commission said Friday that sudden surges of Doosan shares may be a result of leaked information.
At a Wednesday afternoon Doosan board meeting, the group announced that Chairman Park Yong-maan would be replaced by his nephew Park Jeong-won, the current chairman of Doosan Corporation. The news was published at around 2:50 p.m.
But Doosan Corporation’s stock price rose more than 2 percent the morning of the announcement. It surged by more than 4 percent in the afternoon to close at 81,300 won ($67.60), up 7.82 percent compared to the closing price on the previous trading day.
Even after the news that the Korea Exchange embarked on an investigation Friday morning, Doosan Corporation shares rose 1.07 percent to close at 84,700 won.
Shares in Doosan Infracore soared 15 percent to close at 4,705 won on Wednesday, and Doosan Heavy Industries also jumped more than 6 percent to close at 17,550 won on the same day.
Doosan explained that the stock prices rose on a news report published earlier in the morning that Doosan Infracore was selling its debt-ridden machinery division to the Korean private equity firm MBK Partners for 1.13 trillion won.
“We put up the official sell-off notice at 5 p.m. on the Financial Supervisory Service’s electronic system, but we believe investors started buying up our shares after news reports in the morning,” said Bae Gyun-ho, a representative of Doosan Group. “There is no official Korea Exchange investigation on the group.”
Bang Joo-young, who works for the Market Oversight Commission, explained that the investigation is part of monitoring procedures it regularly performs on companies that see sharp rises in their stock prices.
If the commission finds suspicious transactions, it will hold a hearing and report its findings to the Financial Supervisory Service, which will investigate the company as well.
The allegations are also examined by the Securities and Futures Commission, an arm of the Financial Services Commission. If the allegations prove to be true, the Financial Services Commission transfers the case to prosecutors.
By KIM JI-YOON [firstname.lastname@example.org]