Prosecutors, Ildong Pharmaceutical, seized Owner family stock price manipulation suspicion

The prosecution initiated an investigation after capturing the situation in which the Ildong Pharmaceutical owners’ family was manipulating the market price in the process of raising the stake to secure management rights.

According to related industries on the 11th, the Seoul Southern District Prosecutor’s Office, Financial Investigation Division 1 (Director Prosecutor Moon Hyun-cheol) seized and searched Ildong Holdings and Ildong Pharmaceutical’s headquarters last week to obtain data on the division of Ildong Pharmaceutical and changes in stock holdings.

The prosecution believes that executives, including CEO Yoon Woong-seop, have artificially raised the stock price in the process of dividing Ildong Pharmaceutical into Ildong Holdings, a holding company, and Ildong Pharmaceutical, a business company, since 2016 to increase the ownership of the owner’s family.

Afterwards, Ildong Holdings made a public purchase by swapping Ildong Pharmaceutical’s stock with Ildong Holdings’ stock in order to meet the requirements of the holding company. This is because in order to become a holding company, the stake in listed subsidiaries must be maintained at least 20%.

In the process, suspicions were raised that Ildong Pharmaceutical’s stock price was intentionally adjusted to exceed the tender offer price in order to prevent the participation of ordinary investors in the tender offer. This is due to concerns that the owner’s family’s stake in Ildong Holdings could be lowered if a large number of ordinary investors participate in the tender offer.

In fact, through the tender offer process, the owner’s family’s ownership of Ildong Holdings has risen from the 20% range to the 40% range.

Ildong Pharmaceutical Group is a holding company, Ildong Holdings, which controls Ildong Pharmaceutical. Ildong Holdings has an affiliate named’CMJ’ as the largest shareholder, and the owner’s family, CEO Yoon Woong-seop and father, Yoon Won-young, own 90% and 10% shares, respectively.