FSS Special Judicial Police Raids Korea Exchange Over L&F Corrected Disclosure

The Capital Market Special Judicial Police of the Financial Supervisory Service (FSS) raided the Korea Exchange on the 27th in connection with L&F's corrected disclosure regarding its supply contract with Tesla.

According to the financial investment industry, the special judicial police have been securing disclosure data submitted by L&F and documents related to the disclosure review process at the Korea Exchange in Yeouido, Seoul, since this morning.

It was reported that neither the Korea Exchange nor its executives and employees are targets of the investigation, and the raid serves as a reference investigation to secure materials held by the exchange to verify facts related to L&F.

The investigation by the special judicial police is known to be related to suspicions surrounding L&F's large-scale supply contract correction disclosure.

Previously, in February 2023, L&F disclosed that it had signed a high-nickel cathode supply contract worth 3.8347 trillion won with U.S. electric vehicle maker Tesla.

The product supply period was two years, running from early 2024 to the end of 2025.

However, on December 29 of last year, two days before the contract's expiration, after the market closed, L&F disclosed that the supply contract had been reduced to 9.730316 million won.

The company explained that this was a correction following a change in supply volume.

As a result, a massive wave of sell-offs poured in, causing L&F's stock price to plunge by 9.85% the following day, the 30th.

The special judicial police are also reportedly looking into the process of L&F's treasury stock disposal, which took place prior to the corrected disclosure.

In December of last year, L&F disposed of 1 million treasury shares to overseas institutional investors, raising 128.1 billion won.

The special judicial police are reportedly investigating whether L&F sold its treasury shares to avoid company losses without disclosing that the fulfillment of the Tesla supply contract was practically difficult at the time.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.