South Korean securities exchange operator, Korea Exchange (KRX), had reportedly announced its decision to delist biotech firm, SillaJen, from its secondary bourse, 20 months after the firm’s market transactions had stopped amid breach of trust and embezzlement charges.
A Kosdaq market committee meeting will be held within the next twenty business days where it will be finalized whether the bourse operator will go ahead with its delisting decision or grant a second chance for revival to SillaJen.
While SillaJen can raise an objection to the committee if the delisting order pushes through, the committee would still make the final decision, which might dampen SillaJen’s chances of redemption.
KRX had halted the trading of SillaJen’s stock in May 2020 after an investigation on allegations of insider trading was launched involving key figures of the company, including the former CEO, Moon Eun-sang, who was later indicted along with other senior executives over embezzlement and breach of trust charges.
The biotech firm had become the second-largest firm, in terms of market value, on Kosdaq, with the price of each SillaJen stock trading as high as ₩152,300 ($128).
However, in 2019, the firm’s shares took a plunge when it was reported that the firm’s anti-cancer drug candidate, Pexa-Vec, had failed the third phase of its clinical trial. From there on, shares continued falling, hitting ₩12,100 ($10.15), until the suspension order came.
In August 2020, KRX held the first company review committee regarding the delisting of SillaJen but did not reach a conclusion, leading to a one-year reprieve for the firm that began in November 2020.
Authorities required SillaJen to set up a stable governance structure, which it did by bringing in M2N, the largest new shareholder in the company having acquired an 18.23% stake in July 2021. SillaJen also raised ₩100 billion ($84 million) from two rounds of rights offering.
The firm also submitted documents to the KRX to show that its improvement plans are being carried out for management transparency, financial stability, business sustainability, and well as confirmation from experts backing up its validity.
Source credit: http://www.koreaherald.com/view.php?ud=20220118000866