Stock exchange operator Korea Exchange has blocked condom maker Bio Genetics from getting representation on Kyung Nam Pharm’s board, according to industry sources on Mar. 6.
Bio Genetics, which bought an 11.29 percent stake in Kyung Nam Pharm, had aimed to get representation through an extraordinary shareholders meeting scheduled for March 7. The move was considered as part of its process for eventually acquiring the pharma firm.
But KRX has raised a red flag. It said all plans concerning the unloading of its shares must be negotiated with it in advance. Adding that if these conditions are not met, it would not be able to relieve Kyung Nam of the current stock trading suspension, ordered in 2018 for accounting errors.
“We will choose a preferred bidder (for a controlling stake) after going through an internal evaluation process and after consulting KRX,” a Kyung Nam spokesperson said in a statement.
Kyung Nam currently is under a 12-month probation period until it corrects its financial statements while improving management and financial conditions.
Meanwhile, some industry sources believe Bio Genetics’ failure may create new opportunities for Next BT, which is also eyeing Kyung Nam. It is considering filing a lawsuit against the major investor Milestone KN Fund, which owns 12.48 percent stake in Kyung Nam, saying the investor breached a contract for selling its stake.
By Song Seung-hyun (firstname.lastname@example.org)