Kiwoom Securities stock plunges 20 percent over link to alleged stock manipulation

Kiwoom Securities headquarters in Yeouido, western Seoul [NEWS1]

Kiwoom Securities stock plunged more than 20 percent on Monday after it was found to have been used for the alleged stock manipulation of Youngpoong Paper.

The brokerage company faces some 500 billion won ($370 million) worth of outstanding receivables in relation to the abrupt plunge of Youngpoong Paper last week.

Financial regulators suspended the trading of Youngpoong Paper, a paper board manufacturer, and Daiyang Metal, a stainless steel provider, last Thursday after their prices nose-dived to hit the daily trading limit on the previous day.

The sudden collapse raised speculations as the price of Youngpoong Paper just before hitting the daily limit had soared more than 250 percent from its price at the start of the year.

“A total of 494.3 billion won in outstanding receivables incurred from customer consignment accounts due meant that Youngpoong Paper hit the lower trading limit,” Kiwoom Securities reported in a regulatory filing on Friday.

KB Securities cut the annual profit of Kiwoom Securities by 23.3 percent in a report released by analyst Kang Seung-gun on Monday.

KB also lowered the target price for Kiwoom Securities by 5.4 percent to 123,000 won.

Kiwoom Securities stock price closed down 23.93 percent on Monday to close at 76,300 won.

BY JIN MIN-JI [jin.minji@joongang.co.kr]