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| SillaJen's head office in Busan / Yonhap |
By Lee Min-hyung
The Korea Exchange decided Tuesday to delist SillaJen from the secondary Kosdaq, citing a dim outlook of the troubled drugmaker's sustainable growth.
SillaJen shares have been suspended from trading since May 2020 after its management was mired in an embezzlement scandal.
A Kosdaq market committee will confirm whether to delist the company no later than Feb. 18, according to the corporate review committee of the Korea Exchange which made the decision.
Back in 2020, SillaJen's top management ― including former CEO Moon Eun-sang ― was indicted on charges of making unmerited profits by setting up a paper company and engaging in illicit trading. The prosecution estimates that SillaJen's management generated 191.8 billion won ($160.97 million) in unfair profits.
The delisting of the company will leave around 170,000 retail investors with substantial losses. According to data from the company, minority shareholders hold a 92.6 percent stake in the firm as of the end of 2020.
SillaJen reacted immediately to the decision by the exchange, saying that it will lodge an objection and take appropriate steps for its return to the stock market.
"We are going to actively explain our position to the committee," the company said in a statement. "SillaJen also wants to stress its business activities ― such as research and development ― are operating normally. We apologize for causing concerns to shareholders," it added.
The fate of the scandal-tainted biotech firm will be determined in mid-February when the Kosdaq committee will make its final decision on whether to delist the company. If the committee reverses the latest decision and allows trading of the shares to resume, investors can buy and sell SillaJen shares from Feb. 19. In that case, its opening price will be recalculated due to the years-long trading suspension.
But the company will end up being delisted from the stock market unless it presents a specific vision for sustainable growth ― such as how to diversify its product lineup.
In August 2020, the exchange discussed whether to delist the company by convening a corporate screening committee meeting, but failed to reach a conclusion. SillaJen was then given a year to improve its management structure.
