The joint response team to eradicate stock manipulation launched a search and seizure of the KOSDAQ-listed company Alpha AI(043100), which is suspected of unfair trading such as manipulating its stock price through false disclosures. The targets of the search and seizure were reportedly the Alpha AI headquarters as well as the largest shareholder and all former and current executives.
The joint response team believes they spread false information that they were entering the artificial intelligence (AI) business and reaped hundreds of billions of won in wrongful gains through stock manipulation.
According to the financial sector, the joint response team on the morning of the day conducted a search and seizure of the Alpha AI headquarters in Pyeongtaek, Gyeonggi Province, as well as the residences of the company's former and current managers and the largest shareholder.
Alpha AI saw its largest shareholder change last year. An insubstantial investment association (AI Holdings Company) acquired the largest shareholder's equity. The new largest shareholder's source of funds was borrowing secured by stock as collateral, and in the process, paid-in capital increases and the issuance of convertible bonds (CB) followed, showing the typical pattern of a zero-capital M&A.
Afterward, the new largest shareholder changed the company name from the former "AlphaNOX" to Alpha AI and disclosed that it would pursue AI-related businesses such as artificial intelligence system development, large language models (LLM), Autonomous Driving, Humanoid Robot, and semiconductor solutions.
After that, the company actively promoted its plan to push new AI businesses and also raised funds. As a result, the stock price surged. The share price, which had been in the 1,200–1,300 won range before the change of the largest shareholder, exceeded 5,000 won immediately after the change. The Korea Exchange (KRX) also requested an inquiry disclosure regarding the sharp rise in the stock.
They said they would invest the raised funds in the new AI business, but if the funds were used for other purposes, it constitutes a false disclosure.
Afterward, the company explained in the first quarter of this year, "We added business purposes with the goal of diversifying our business, but have not yet been able to push the relevant business in earnest," and noted, "We plan to supplement and proceed in the future."
The joint response team is also said to be looking into allegations that they spread false information to lure investors while engaging in price rigging.
Alpha AI received a disclaimer of opinion from an external auditor in Apr., triggering a delisting reason. The stock is currently suspended from trading.