Prosecutors Raid Korea Zinc Over Rights Issue Manipulation Allegations... Mirae Asset, KB Securities, and KEB Hana Bank Included

[Financial News] Prosecutors have launched a compulsory investigation into Korea Zinc and securities firms that arranged the rights offering, on suspicion of unfair trading during last year's capital increase process.
The Financial and Securities Crime Joint Investigation Division of the Seoul Southern District Prosecutors' Office, led by Kim Jin-ho, announced on the 4th that it was conducting a search and seizure at Korea Zinc's headquarters in Jung-gu, Seoul. The search also targeted Mirae Asset Securities and KB Securities, which acted as the lead managers for the company's treasury stock tender offer and rights offering, as well as certain departments of KEB Hana Bank.
This marks the first search and seizure of the three companies in six months since last April. At that time, prosecutors also secured evidence such as computers and documents from the headquarters of Korea Zinc, Mirae Asset Securities, and KB Securities.
Prosecutors suspect that Korea Zinc may have violated the Financial Investment Services and Capital Markets Act (FSCMA) during the announcement of its 2.5 trillion won rights offering on October 30 last year. Authorities allege that the company planned to use the rights offering to repay the treasury stock tender offer before it was completed, yet failed to properly disclose this information.
Korea Zinc conducted its treasury stock tender offer from October 4 to 23 last year. At the time, the company publicly stated, "There are no plans to make changes to the financial structure following the tender offer." However, it was revealed that Mirae Asset Securities, the lead manager, began due diligence for the rights offering as early as October 14.
Due to concerns over false statements and unfair trading, the Financial Supervisory Service (FSS) requested a correction report on November 6 of the same year. One week later, Korea Zinc withdrew its rights offering plan. In January, the FSS referred Korea Zinc's management to prosecutors on suspicion of violating the FSCMA.
welcome@fnnews.com Jang Yu-ha Reporter