[Anchor]
The Financial Supervisory Service (FSS) has launched a formal investigation into Samchundang Pharm, which recently saw its stock price plummet following various controversies after briefly reaching the top spot on the KOSDAQ market. Experts point out that restoring market trust is the first step toward addressing the neglect of the KOSDAQ.
Reporter Kim Hye-min has the story.
[Reporter]
Samchundang Pharm became the KOSDAQ market's largest company by market capitalization in March, with its stock price soaring to 1.23 million won per share.
However, the stock price plunged to the 200,000 won range just about three months later following various controversies.
In February, Samchundang Pharm announced that it had signed a commercialization agreement for oral diabetes and obesity treatments with 11 European countries, and issued a press release claiming the contract was worth 5.3 trillion won.
The company subsequently announced an exclusive sales contract with the United States worth 15 trillion won. However, suspicions of false disclosure arose due to the fact that the counterparty was not disclosed, the unusually high 90 percent profit-sharing ratio, and the low initial technology fees relative to the scale of the deal.
At the time, the Korea Exchange designated the company as an unfaithful disclosure corporation and imposed penalty points. It has now been confirmed that the Financial Supervisory Service has also launched a formal investigation into Samchundang Pharm.
The FSS is focusing on whether there were any violations of disclosure obligations, such as the inclusion of false information in the company's public filings.
[Ahn Byung-jun / Lawyer: If it is revealed that information was intentionally falsified or omitted, the company could face a fine of up to 2 billion won under the Capital Markets Act, or imprisonment of up to five years or a fine of up to 200 million won...]
A financial regulatory official stated, "The collapse of Samchundang's stock price has poured cold water on the government's policy to revitalize the KOSDAQ market."
Celebrating its 30th anniversary this year, the KOSDAQ market remains below the 1,000-point mark from its inception, largely ignored by investors, unlike the KOSPI which has seen a sharp rise this year.
As the FSS prepares measures to improve disclosures for pharmaceutical and biotech companies, the Korea Exchange is also working to restore market trust by strengthening systems for delisting insolvent companies.
[Choi Ji-woo / Executive Director, KOSDAQ Market Division, Korea Exchange: We will strengthen the criteria for cumulative penalty points for unfaithful disclosures to ensure that basic market discipline operates more strictly.]
Attention is now focused on whether the market, which has been stigmatized by the "KOSDAQ discount" due to insolvent companies and controversies over unfair trading, can regain the interest of investors.
(Video reporting: Jo Chang-hyun | Video editing: Won Hyung-hee | Design: Kim Ye-ji, Choi Ha-neul | VJ: Jeong Han-wook)
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