[Alpha Biz= Paul Lee] Shares of Iljin Power, a KOSDAQ-listed energy company, were abruptly suspended from trading on June 13 following the company's disclosure of alleged embezzlement and breach of trust involving its management. The Korea Exchange (KRX) halted trading to assess whether the company should undergo a substantive review for possible delisting.
The sudden suspension has sparked criticism from investors, who argue that such automatic halts—triggered merely by the announcement of allegations—unfairly tie up their capital. While allegations of misconduct can negatively impact corporate value, critics say that an immediate freeze on trading penalizes existing shareholders, especially when the company appears to have functioning internal controls and a solid business track record.
Iljin Power had been operating with a reputation for financial soundness in recent years and was actively benefiting from renewed investor interest in nuclear energy stocks. As of June 13, the company’s margin trading ratio stood at 4.4%, indicating a modest level of credit-based trading. Investors who purchased shares using margin loans now face the burden of interest payments during the trading suspension period.
Some market participants have questioned the rigidity of the KRX’s enforcement approach, arguing that it may inflict greater losses on investors in companies that were otherwise performing well.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
