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Meritz Securities office building. (Photo=Meritz Securities) |
[Alpha Biz= Reporter Kim Minyoung] Meritz Securities has successfully exited its substantial stake in Il Dong Pharmaceutical, having previously held more than 5% of the company's shares. Despite engaging in frequent transactions, including on-exchange trading and borrowing, Meritz managed to cleverly evade reporting obligations.
According to the Financial Supervisory Service’s electronic disclosure system, Meritz Securities announced on the 12th that its holdings in Il Dong Pharmaceutical have decreased from 2,498,896 shares (8.53%) to just 236 shares.
In July of last year, Meritz Securities acquired Il Dong Pharmaceutical’s first tranche convertible bonds (CB) through a total return swap (TRS) agreement. In addition to acquiring CBs, Meritz frequently bought and sold Il Dong Pharmaceutical shares through on-exchange transactions. On July 20, 2023, Meritz acquired CBs worth 32 billion won, and on July 28 of the same year, it purchased an additional 8 billion won worth of the same CBs. It also acquired 458 common shares through on-exchange transactions. As Meritz’s stake exceeded 5%, it reported its holdings on August 3, 2023.
Afterward, Meritz continued to trade Il Dong Pharmaceutical shares frequently through on-exchange transactions and borrowing. However, no significant changes of more than 1% in the trading scale or borrowing scale occurred compared to the original holdings. According to the Capital Markets Act, if a company acquires more than 5% of shares and the holding ratio changes by more than 1%, it must report to the Financial Services Commission (Financial Supervisory Service) within five days of the change. However, for those holding shares for simple investment purposes, the reporting obligation is extended to the 10th of the month following the month in which the reporting obligation arises.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
