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[Alpha Biz=(Chicago) Reporter Kim Jisun] In response to suspicions over when Meritz Securities sold its shares before Ewha Group-affiliated shares such as Ewha Electro-Mechanics and EID were suspended, Lee Bok-hyun, head of the Financial Supervisory Service, said, "It is clear that we have no choice but to use it as a clue to a strong investigation."
"It sold shares of Ewha Electric Co. held by Meritz Securities Co. on the previous day, and Ewha Electric Co. exercised its preemptive right through a bond with warrant (BW) before it announced its lithium mine business, which can be called a coincidence," Lee said in response to the question by Lee Yong-woo, a lawmaker of the main opposition Minjoo Party of Korea, during a parliamentary audit of the National Assembly's National Policy Committee on the 17th.
A bond with warrant (BW) is the right to take over a certain amount of new shares at a predetermined price, and investors can receive principal and interest by holding bonds and earn capital gains if the stock price rises.
Meritz Securities earlier invested 40 billion won worth of bonds issued by Ewha Electro-Mechanics in 2021.
Since then, after Ewha Group Chairman Kim Young-joon was arrested in May on charges of embezzlement and breach of trust, Ewha Electro-Mechanics and other group-affiliated shares were suspended, and Meritz Securities sold all of its shares held the day before the suspension of trading and realized profits worth about 9 billion won.
This raised suspicions in the market that Meritz Securities knew internal information in advance and sold it.
Meanwhile, criticism also ensued over the results of a recent FSS inspection, which found that some executives and employees of Meritz Securities' corporate finance (IB) headquarters received profits worth billions of won by investing in private equity convertible bonds (CB) using job information.
Employees of one of the three Meritz Securities IB headquarters teams caught in the inspection are known to have all retired after making profits.
Asked by lawmaker Lee Yong-woo whether an investigation into the rest of the team is also necessary, director Lee Bok-hyun replied, "It seems necessary."
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
