South Korea’s bourse operator suspended trading of shares of five companies suspected of alleged stock manipulation, officials said Wednesday.
The Korea Exchange (KRX) said it will suspend stock trading of four companies listed on the primary KOSPI market — Dongil Industries Co., Manho Rope & Wire Ltd., Pangrim Co. and Taihan Textile Co. — and Dongil Metal Co. on the tech-heavy KOSDAQ market starting Thursday due to steep falls of their stock prices earlier Wednesday.
After the nosedive, financial authorities said they are looking into the possibility there were unfair trading practices related to the items.
As of Tuesday, the stock prices of the companies had skyrocketed 300 percent compared with the prices tallied on Jan. 1, 2021.
The KRX, the Financial Services Commission and the Financial Supervisory Service are looking into the possibility of stock manipulation, as the items were all recommended at an online community suspected of a similar case before.
Earlier this year, the Supreme Court confirmed the suspended two-year prison term for the operator of the community on charges of gaining profit through unfair trading.
Wednesday’s case drew comparisons to an alleged stock manipulation scheme from earlier this year, involving the head of an unregistered investment consulting firm and nine companies, including energy firm Samchully Co. and Seoul City Gas Co.
The stocks of the nine listed companies had steadily risen for years before nosediving in late April following mass sell-offs through SG Securities Korea Co., the local branch of the Societe Generale Group of France.
About 1,000 investors are said to have suffered huge losses estimated to be between 800 billion won (US$627 million) and 1 trillion won.
The country’s financial regulators have since declared a war against unfair trading in financial markets.
Source: Yonhap News Agency