Korea Exchange (KRX) decided to temporarily halt trading in the common shares of NH Investment & Securities early on the 7th. The reason is a class-action lawsuit filed over FADU, a corporations that stirred controversy for an allegedly "inflated listing" in 2023. NH Investment & Securities was the underwriter for FADU's initial public offering (IPO).
Korea Exchange (KRX) said that, citing the "filing of a class action related to securities," it will suspend trading of NH Investment & Securities shares on the KOSPI market from 7:58 a.m. to 9:30 a.m. that day.
NH Investment & Securities was sued the previous day by law firm Hannuri for 100 million won in damages. The complaint was filed with the Seoul Southern District Court.
The plaintiffs who filed the suit said, "For its KOSDAQ listing, FADU prepared and disclosed a securities registration statement and an investor prospectus in Jul. 2023, and falsely stated information to issue shares by public offering," and added, "NH Investment & Securities, which had a duty of due care to prevent false statements in the securities registration statement, actively participated in the false statements instead, and we seek damages for the losses incurred from the share price decline as a result."
The class action is said to include investors who bought FADU shares on the market from Aug. 7, 2023, the listing date, until before the filing of the quarterly report on Nov. 8 of that year and suffered losses.
In response, NH Investment & Securities said, "We faithfully recorded the findings in accordance with the guidelines for FADU corporations due diligence, and there was no illegal conduct in the process."
FADU, a semiconductor fabless corporations, touted growth based on its advanced technology during its KOSDAQ listing in 2023. However, in a third-quarter disclosure the same year, it reported a sharp deterioration in results, triggering controversy over an "inflated listing."