The stock price of Shin Poong Pharm, a listed company on the KOSDAQ, has been plummeting for two consecutive days. This is interpreted as stemming from the news that second-generation owner Jang Won-jun, former CEO, was reported to the prosecution for allegedly selling his stocks ahead of the announcement of the failure in developing a treatment for COVID-19.
As of 10:22 a.m. on that day, Shin Poong Pharm was trading at 8,920 won, down 440 won (4.70%) from the previous trading day. During the session, it fell to 8,500 won, marking a new one-year low for the second day in a row. The preferred shares of Shin Poong Pharm were also trading at 14,200 won, down 700 won (4.70%) at the same time.
The day before, the Securities and Futures Commission of the Financial Services Commission announced it would report the second-generation founder (former CEO Jang Won-jun) and the holding company of Shin Poong Pharm, Songam, to the prosecution for violating the Capital Markets Act regarding the use of undisclosed important information related to Shin Poong Pharm's COVID-19 treatment development after holding its third regular meeting on the 12th of this month.
Following this news, on the 17th, the stock prices of Shin Poong Pharm and its preferred shares closed down 8.68% and 5.70%, respectively.
According to the Securities and Futures Commission, former CEO Jang learned of the failure in phase 2 and sold 200,000 shares of Shin Poong Pharm, out of 12,821,052 shares owned by his family-run Songam, at a price of 84,016 won per share through an over-the-counter (block deal) transaction before that information was made public in April 2021.
This large-scale sale enabled the owner's family to earn a trading profit of 156.2 billion won and avoid losses amounting to 36.9 billion won. At the time, the stock price of Shin Poong Pharm had surged as its self-developed malaria treatment, Pyramax, became a clinical subject for a COVID-19 treatment, but it plummeted more than 10% due to this block deal.