An executive at NH Investment & Securities accused of using nonpublic information related to a tender offer to gain unfair profits has been removed from duties. NH Investment & Securities moved to reorganize under an acting system.
NH Investment & Securities said on Jan. 6 that it removed Lee Seong, head of the IB1 Division, from duties, and that Kim Hyeong-jin, head of the Industry 1 Headquarters, will serve as acting head of the division.
The joint response team to eradicate stock price manipulation, launched by the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange (KRX), conducted a search and seizure on Jan. 28 of the office of Lee, head of NH Investment & Securities, and the department related to the tender offer. The joint response team said Lee, who oversees IB operations, repeatedly passed on information related to the tender offer to colleagues, acquaintances, and other associates, and that they used this information to gain about 2 billion won in unfair profits over roughly two years. The information the executive passed to acquaintances was reportedly related to 11 stocks for which NH Investment & Securities acted as the tender offer manager.
NH Investment & Securities moved immediately after authorities detected the illegal activity. In a statement on Jan. 30, NH Investment & Securities said, "We immediately removed the executive under investigation from the relevant duties," and noted, "We take seriously that a person in a role requiring the highest level of ethics has been involved in an unfortunate matter, and this is a decision for faithful cooperation with the investigation and for strengthening internal discipline."
With the head of IB1, a key organization at NH Investment & Securities, embroiled in an unfortunate incident, an acting system is being put in place. Kim Hyeong-jin, who was appointed acting head of the IB1 Division, is regarded as an expert in the IB field and served as executive director of the Industry 2 Headquarters before taking the current role as head of the Industry 1 Headquarters.
Along with establishing the acting system, NH Investment & Securities will also form an "internal control reinforcement task force (TFT)" led by President Yun Byeong-un. In addition, on Feb. 4 the company said it would impose a total ban on domestic stock transactions by executives.