Following SK Networks Chairman's Indictment
Korea Exchange has suspended trading in SKC stock following the prosecution’s indictment of SK Networks chairman Chey Shin-won on charges of embezzlement and a breach of trust.
SKC announced on March 8 that the amounts of money involved in Chey’s breach of trust and embezzlement were 123.6 billion won and 9.9 billion won, respectively. "We will take measures regarding this case in accordance with the relevant law," SKC said.
Chey was indicted for misappropriating 223.5 billion won from the six companies he runs, including SKC, SK Networks, and SK Telesys.
In a related move, Korea Exchange’s Securities Market Division suspended trading in SK Networks and SKC stocks on March 5. There is no fixed period for the suspension of stock trading. However, the exchange lifted the suspension on SK Networks Stock on March 8.
The exchange will review whether SKC is subject to a substantive review of listing eligibility. A substantive review usually lasts for 15 business days and can be extended for another 15 business days if necessary. The suspension of stock trading will be lifted if the exchange arrives at the conclusion that SKC is not subject to a substantive review.
"We will shorten the review period by cooperating with the exchange as much as possible," SKC said.
Even if SKC becomes subject to a substantive review, SKC will not be immediately delisted. The exchange will review again whether to delist SKC or not for 15 working days. There are many cases where a company stays on the stock market after a substantive review.
Stock analysts say the embezzlement case is not related to SKC’s corporate fundamentals. They believe that the issue is irrelevant to SKC's fundamentals and may serve as an opportunity for SKC to strengthen internal control and shareholder return measures.