|The headquarters of SillaJen located in Yeouido, Seoul. / Korea Times file|
By Anna J. Park
Will biopharmaceutical company SillaJen face a delisting from local stock markets or will it revive again with the resumption of its stock trading? The answer to this question is slated to be decided at the end of this month.
According to industry sources, the nation's bourse operator Korea Exchange (KRX) will hold its corporate review committee meeting on Nov. 30, voting on whether to resume trading of the now-suspended stock or delist it from the market.
Glamorously going public back in 2016, SillaJen became the second-largest market cap company listed at Korea's tech-heavy KOSDAQ market in 2017. That's when the stock price reached its all-time high of 152,300 won ($136.35) over the news that Pexa-Vec ― its treatment for liver cancer ― entered phase 3 trials.
Yet the stock price started to plunge in August last year, as the phase 3 trials failed to yield results. Its price plummeted from 44,550 won to 15,300 won in just four days that month. Its price fell until the KRX suspended the stock's trading in early May this year. The stock's price has been frozen at 12,100 won, the closing price on May 4 when its trading was suspended.
The main reason behind the stock's suspension of trading was that the prosecution indicted the biopharmaceutical company's former and incumbent management on charges of embezzlement and breach of duty. SillaJen's former CEO Moon Eun-sang is accused of illegally acquiring 35 billion won worth of company shares back in 2014 using a paper company. The firm's other high-level officials were also accused of insider trading, selling their shares before the news of the phase 3 trial failure was made public.
If the KRX's corporate review committee, slated to be convened on the last day of this month, decides to allow the resumption of the stock's trading, SillaJen stocks could be traded again from the first day of December. If they decide on delisting the company from the KOSDAQ, the KOSDAQ's market committee will determine the delisting of SillaJen within 15 days.
About 169,000 minor shareholders of SillaJen have been fiercely engaged in protests in front of the Seoul office building of the KRX for months, urging the bourse operator to immediately allow trade of the stock. They are estimated to hold about 87.6 percent of the company's shares.
"The KRX suspending the company's trading over allegations against the company's former and current management that happened before the company's initial public offering is an unjust and unfair act that violates the minor shareholders' property rights," said the minor shareholders' association.
The biopharmaceutical company attributed the issues to the moral hazard of some managers and stressed that the risk factors are gone now that they have all been replaced.