Dongbu Group head faces probe over stock salesDongbu Group Chairman Kim Jun-ki is facing an investigation from the prosecutor’s office on an allegation that he illegally avoided financial losses by selling his Dongbu E&C stocks before the builder applied for a court receivership.
The Securities and Futures Commission, an arm of Financial Services Commission, on Wednesday said that it requested the prosecutor’s office to investigate whether or not he already knew the undisclosed information the company was going to go for court receivership.
Under Korean Capital Market Act, it is illegal for a shareholder to sell stocks to avoid losses after getting information that the company is in trouble. The Financial Supervisory Service found that Kim sold shares of four Dongbu affiliates he held under other people’s securities accounts in October 2014, which was two months before the group’s construction arm filed for court receivership due to a liquidity crunch. Following the court receivership, Dongbu E&C shares plunged.
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