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Meritz Securities office building. (Photo=Meritz Securities) |
[Alpha Biz= Reporter Kim Sangjin] Prosecutors have conducted a search of Meritz Securities in relation to allegations of violating the Capital Markets Act regarding its transactions involving convertible bonds (BW) with the I Group (Ehwa Group).
The Seoul Central District Prosecutor's Office's Tax Crimes Investigation Division (led by Chief Prosecutor Lee Jin-yong) initiated the search of Meritz Securities' headquarters and other locations on the morning of the 19th, focusing on potential violations related to fraudulent trading under the Capital Markets Act.
The investigation centers around the issuance of BW worth 170 billion KRW by I Group subsidiaries — Ehwa Electric, I-IDI, and Etron — through Meritz Securities in 2021. Prosecutors are looking into whether employees of Meritz Securities engaged in fraudulent trading practices during this process.
Previously, prosecutors indicted former Ihwa Electric chairman Kim Young-jun on charges of violating the Capital Markets Act. He is accused of issuing BW with collateral from the I Group’s subsidiaries, while falsely declaring them as unsecured, leading to charges of false disclosures.
The investigation is also examining whether Meritz Securities used undisclosed information to trade in the BW and the stocks acquired through warrants before they were made publicly available, raising suspicions of insider trading.
The three publicly listed I Group companies had their trading halted in May last year as investigations into the management began, and there are allegations that Meritz Securities may have sold stocks based on insider information before the trading suspension.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
