The Financial Supervisory Service's special judicial police for the capital market raided the Korea Exchange (KRX) over L&F's revised disclosure on its supply contract with Tesla.
According to the investment banking industry on the 27th, the special unit was said to have secured disclosure materials submitted by L&F and documents related to the disclosure review process at the Korea Exchange (KRX) in Yeouido, Seoul, from the morning.
The raid was reported to be in the nature of a witness inquiry to secure materials kept by the exchange to verify facts related to L&F. Neither the Korea Exchange (KRX) nor its officers and employees are the subject of the investigation.
The special unit is said to be examining allegations surrounding L&F's revised disclosure of a large-scale supply contract.
In Feb. 2023, L&F disclosed that it had signed a 3.8347 trillion won contract to supply high-nickel cathode materials to U.S. electric vehicle maker Tesla. However, on Dec. 29 last year after the market closed, two days before the contract ended, L&F disclosed that the supply contract value had been reduced to 9,733,316 won.
In this process, the special unit is reportedly checking whether L&F recognized that fulfilling the Tesla supply contract at the time was effectively difficult but did not disclose it, and whether the company sold treasury shares to avoid losses.