Financial watchdog raids SK hynix headquarters in FADU investigation

Industry

Published: 01 May. 2024, 16:40 Updated: 01 May. 2024, 19:09

Financial watchdog raids SK hynix headquarters in FADU investigation

A man walks past the logo of SK hynix outside the company's Bundang office in Gyeonggi on Jan. 26. [YONHAP]

The Financial Supervisory Service (FSS) raided the SK hynix headquarters in Icheon, Gyeonggi, as part of its investigation into the alleged bloated initial public offering (IPO) of FADU, a fabless solid-state drive (SSD) and controller company.

Chipmaker SK hynix is one of the major clients of FADU. The raid intends to "compare FADU's data with SK hynix's," the FSS' special judicial police said.

FADU, established in 2015, went public on the tech-heavy Kosdaq in August through the technology growth special listing track.

FADU's stocks are under scrutiny, as investors have questioned the eligibility of some corporate listings for not disclosing information that could be pivotal to stock prices.

Before it went public, FADU told investors that it estimated its annual revenue for 2023 to total 120 billion won ($86.5 million). It debuted on the Kosdaq market with a 31,000 won offering price and a market capitalization of about 1.5 trillion won of at the time.

But it turned out that its revenues in the second quarter stood at 59 million won, far from the 17.6 billion won of the previous quarter. Third-quarter revenue remained weak at 320 million won.

FADU’s stock price more than halved since the IPO.

Earlier, the FSS also raided the headquarters of NH Investment & Securities and Korea Investment & Securities, the main underwriters of the IPO.

BY SARAH CHEA [chea.sarah@joongang.co.kr]