Korea Exchange's KOSDAQ Market Headquarters decided to de-list Gyeongnam Pharmaceutical Co. at a corporate review board meeting on the 14th. After reviewing the details of implementation of improvement plans submitted by Gyeongnam Pharmaceutical last month, the committee concluded that transparency in management was insufficient.

Gyeongnam Pharmaceutical Co. began its crisis in 2007 when former chairman Lee Hee-chul bought Gyeongnam Pharmaceutical Co. from the Green Cross for 24.5 billion won. Lee was indicted in 2014 on charges of posting 5 billion won worth of false sales from 2008 to 2013 the following year, and was sentenced to three years in prison last year as embezzlement and fraud were recognized.

The situation worsened as Lee had conflicts with the company by appointing his deputy as a registered director to regain control of the company. Lee was the largest shareholder with a 20.83 percent stake in Gyeongnam Pharmaceutical Co. (2344,146 shares) until January of this year. Gyeongnam Pharmaceutical Co. filed a petition with the court in September last year to compensate Lee for 16 billion won in damages from accounting fraud and 5 billion won in stock inflation to prevent him from returning. Lee also stood up for an injunction to prevent the company`s management from holding an extraordinary shareholders` meeting to appoint a new board member, but was not accepted. In January, Lee eventually pushed for selling all of his shares to Ever Solution and Telomere for 25 billion won. However, as the National Tax Service confiscated the entire stock of Lee, the contract was also canceled.

In March, the Korea Exchange suspended trading of shares in Gyeongnam Pharmaceutical Co. because of the accounting fraud and management rights dispute. In May, a corporate review committee was held once, and the company was given a period of improvement and demanded that the company submit a management improvement plan. Gyeongnam Pharmaceutical Company pushed for an open sale to normalize its management. MilestoneKN, a private equity fund formed by Hana Financial Investment and other brokerages last month, secured 12.48 percent of Gyeongnam Pharmaceutical Co. with a 10.5 billion won increase. Gyeongnam Pharmaceutical Co. submitted its management improvement plan to the new management team last month, but the committee reportedly took issue with the fact that 토토놀이터
the source of its funds is uncertain.

"It could be overturned on the Kosdaq."

Small shareholders, who had expected to remain listed on a new large stock market, have fallen into panic. As of the end of September, the number of small shareholders of Gyeongnam Pharmaceutical Co. stood at 5252, which is about 8008 million (71.86 percent). Small shareholders of Gyeongnam Pharmaceutical Co. have recently tried to block the delisting of the listing by submitting a new management certificate to the exchange.

According to regulations on listing KOSDAQ markets, the KOSDAQ Market Committee will decide whether to delist the company and grant the period for improvement by August 8, which is within 15 business days. Some predict that the KOSDAQ market committee will come up with a different conclusion during its final deliberation. This is due to the fact that the committee's decision was overturned by the KOSDAQ Market Committee. Although the Board of Audit and Inspection of Korea decided to delist MP Group, which is a management company of "Mr. Pizza," on the 3rd, the Kosdaq Market Committee, which took place a week later, reversed its decision to delist and granted a four-month improvement period.

"Samba and Equality Problem" vs. "The situation is different"

Small shareholders of Gyeongnam Pharmaceutical Co. are strongly opposed to the idea as there is a high possibility of delisting from the listing. A flurry of postings raised the issue of fairness, citing the case of Samsung BioLogics, which was decided to remain listed on the Cheong Wa Dae's national petition board. "Samsung BioLogics is not fair to say that it will be traded even after receiving 8 billion won in fines due to accounting fraud worth 4.5 trillion won, and Kyungnam Pharmaceutical will be delisted after receiving 40 million won in fines." "Although Gyeongnam Pharmaceutical Company gave us six months of improvement in May, we judged that it did not implement its improvement plan properly after that." said a representative for the exchange. The Board of Audit and Inspection has already given the opportunity to maintain the listing, abolish the listing and grant the period of improvement among the three options, but has failed to implement the improvement plan properly.

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