South Korea market watchdog looking into Korea Zinc's share issuance plan
· CNA · JoinSEOUL : South Korea's financial market watchdog said on Thursday it acknowledged concerns among investors over a recent decision by Korea Zinc to issue new shares and was looking into the plan to determine if it involved any unfair practices.
"We will hold the company and related securities brokerage accountable if any unfair trade or misconduct is found," Hahm Yong-il, senior deputy governor of the Financial Supervisory Service, told a briefing.
Hahm also said authorities could require Korea Zinc to submit a revised plan for share issuance if there was any major omission affecting investor decisions in the filing submitted on Wednesday.
The world's top zinc refiner on Thursday announced a plan to issue new stock worth about $1.8 billion, sending its stocks plunging. The surprise move came just two days after it bought back shares at a higher price and pledged to cancel all of them to help enhance shareholder value.
Korea Zinc, which had borrowed heavily to buy back $1.5 billion of its shares at a premium price to help ward off the takeover attempt from its biggest shareholder Young Poong and partner MBK, said most of the proceeds from the new share issuance would be used to repay debt.
Run by the Choi family, Korea Zinc has been in a bitter fight to control the $18 billion zinc empire with the co-founding Chang family, whose conglomerate Young Poong made an initial joint offer with private equity firm MBK Partners in September.
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