FSS suspends two Kospi stocks over alleged manipulation
Published: 19 Oct. 2023, 17:29
- JIN MIN-JI
- [email protected]
Korea’s financial watchdog suspended the trading of two Kospi-listed stocks starting on Thursday after their prices nose-dived the previous day, raising speculations about price manipulations.
The Financial Supervisory Service (FSS) said on Wednesday it will suspend the trading of Youngpoong Paper, a paper board manufacturer, and Daiyang Metal, a stainless steel provider, through to an unspecified date in a bid to “rapidly establish the trade order and to protect investors.”
Daiyang Metal owns a 45 percent stake in Youngpoong Paper.
Youngpoong Paper, which has a market cap of 1.58 trillion won ($1.2 billion), slid 29.96 percent on Wednesday to close at 33,900 won. Its price soared more than 250 percent this year before the drastic fall.
Daiyang Metal, which has a market cap of 84.8 billion won, slid 29.91 percent on the same day to close at 2,250 won. Its price rose 1.7 percent over the same period.
Their prices fell to hit the daily trading limit Wednesday morning.
Prosecutors requested an arrest warrant for four people who may have been involved in the recent plunge of the two stocks, according to local media reports on Thursday.
“Nothing so far has been confirmed on the specific details of the rumors on unfair trades,” said Youngpoong Paper and Daiyang Metal in separate regulatory filings on Thursday.
Youngpoong Paper is one of the seven stocks that are expected to be included in the Kospi 200 by the Korea Exchange in the regular readjustment period in December.
The FSS investigated eight stocks, including Samchully and Daesung Holdings, which resulted in the evaporation of more than 13 trillion won in market capitalization in just three weeks in April.
Alleged victims who lost money from the stock crash argued they lost at least 135 billion won.
The stock plunge was accelerated by the liquidation of contracts for differences (CFD), a leveraged derivative that allows traders to profit from price movement without owning the underlying assets.
BY JIN MIN-JI [[email protected]]
with the Korea JoongAng Daily
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