Stock Scandal
Kumho Asiana Group Chairman Park Sam Koo has been accused of allegedly manipulating stock prices in order to lower the takeover price of Kumho Industrial Co.
According to the industry, a man surnamed Kang, who has 2,300 shares of Kumho Industrial, sued Chairman Park and 20 executives of Kumho Group this month for professional malpractice; violation of the financial investment laws, including insider trading, market price manipulation and unfair trading; and bid interference.
Kang claimed that Chairman Park intentionally lowered the stock price by registering the shares of sale, which were owned by executives of Kumho Group, in a bid to lower the takeover price of Kumho Industrial.
He said that it was a measure to lower the takeover price in the bidding battle of Kumho Industrial, in which the final bidding is scheduled on April 28. Kumho Industrial is the major stockholder of Asiana Airlines. Chairman Park has a primary purchase option, which allows him to buy back enough shares to maintain Kumho Industrial’s management rights, or a share ratio of 50 percent plus one stock, at the highest bid.
Kang also cast doubts on stock price manipulation using closed information. On Feb. 26, when Shinsegae submitted a letter of intent (LOI) to acquire Kumho Industrial, Kumho Industrial President Won Il-woo sold 3,000 shares, while Kumho Engineering and Construction Vice President and its director sold 2,000 shares each as well. Accordingly, they all profited. However, the stock price of Kumho Industrial plunged 13.3 percent when Shinsegae withdrew the LOI the next day.
Kang presented the list of sales of stock by Kumho executives from Nov. 2014 to February this year as evidence.