SMEC securities-related class action
SMEC’s board of directors determined to raise capital in the amount of 22.6 billion won at the board meeting convened on December 11, 2013, and disclosed the news after the market is closed that day. On December 12, 2013, the day after the capital increase news was disclosed, SMEC’s share price recorded the lower limit of 5,630 won, and has plummeted to 4,750 won in two weeks. SMEC’s report dated on December 17, 2013, shows that DMC, the second majority shareholder of SMEC, sold its most of shares during December 10 ~ 11, just before the disclosure.
DMC can be said to be Park Hyo Chan’s personal company because Park Hyo Chan holds 100% of shares of DMC with Ilim Nanotech, Park Hyo Chan’s affiliated company. Hannuri Law reasoned after thorough analysis that Park Hyo Chan sold SMEC’s shares held by DMC just before the disclosure after he was aware of the disclosure - capital increase, thus avoiding loss, which is insider trading strictly prohibited by Capital Markets Acts.
Hannuri Law is planning to file a securities related class action against DMC and relevant parties on behalf of those who purchased SMEC shares during December 10 ~ 11, 2013, class period.