Mistrust on stock market triggers No.1 KOSDAQ firm to sell its stake overseas

Chairman Seo Jeong-jin of Celltrion, Korea`s major biotechnology firm with No.1 stock value in the tech-heavy KOSDAQ, said he would sell his firm to a foreign buyer because he is exhausted in fighting with short stock sellers. "Short Celltrion stock selling occurred for 412 days among 432 trading days in the past two years. We countered the selling spree by injecting 800 billion won (717 U.S. million dollars) worth capital, but can`t tolerate any longer," Seo said. "I asked a number of times financial authorities to improve such negative short selling practice, but saw no improvements."

The Employment and Labor Ministry last month selected Celltrion as one of representative firms that was creating jobs for a creative economy. After having been forced an honorary retirement at Daewoo Motor in 1999 in the wake of the Asian currency crisis, Seo jumped into the then unfamiliar biopharmaceutical market and grew Celltrion into Korea`s No. 1 KOSDAQ firm. It is a pity that such a sound company has been suffering from false rumors by speculative forces.

Some securities market sources are suspicious on Celltrion`s claims, however. Short selling means borrowing stocks from investors and selling them, repaying investors by buying the same stocks later, which is a well accepted practice globally due to its market vitalization effect. In Korea, strong regulation is imposed on excess short selling to prevent stock market volatility.

Financial authorities said, "We have observed Celltrion stock trading since late 2011 when it raised the issue. But there was no evidence to stock manipulation." The company can`t take issue of short selling if short selling was made due to the firm`s uncertain future. If the company leader tried to boost stock prices by dumping the responsibility of sluggish management to others, this is not a proper attitude.

Celltrion incident means a big mistrust on Korea`s stock market. President Park Geun-hye ordered strict punishment of stock manipulation at her first cabinet meeting after the inauguration. However, financial authorities are known to be saying that it will not introduce special judicial police rights that are granted to Financial Supervisory Service employees in its stock manipulation eradication plan. There are rumors that if an employee who is a civilian is shifted to a civil servant position, his or her salary will be cut. It is nonsense if this reason is true since the government has to use all possible means to eradicate speculative forces.