Chief Executive Jeon In-seok, the largest shareholder of Sam Chun Dang Pharm, has withdrawn a plan to sell shares worth about 250 billion won.
Sam Chun Dang Pharm disclosed on the 6th that Jeon will withdraw the previously submitted report on a plan for specific securities transaction and other dealings.
The company said, "As the stock price fluctuated more than 30% based on the final closing price before the transaction plan report date, market conditions changed," explaining the reason for the withdrawal. The date the withdrawal reason occurred was on Apr. 3.
Under the initial plan, Jeon was to dispose of 265,700 common shares via after-hours block trading from Apr. 23 to May 22 at 941,000 won per share. The total transaction amount was about 250 billion won. However, as the plan was canceled before the transaction commenced, no actual trading took place.
Earlier, as Sam Chun Dang Pharm's share price plunged, critical views grew over Jeon's plan to sell equity. The concern was that a major shareholder's equity sale carried out for tax payment could exacerbate the stock's decline. There have been past cases where some bio corporations, including Shin Poong Pharm and SillaJen, saw their shares plunge after large-scale equity sales by major shareholders.
Accordingly, on online securities communities such as stock discussion boards, some shareholders are saying the withdrawal eased concerns about a flood of large sell orders.
Sam Chun Dang Pharm plans to hold a press briefing in the afternoon to announce the status of key pipeline initiatives and mid- to long-term growth strategies. As the company said it will file a defamation complaint against a blogger who raised stock manipulation allegations, its communication approach has also come under scrutiny. The Korea Exchange (KRX) has given prior notice that it will designate Sam Chun Dang Pharm as an unfaithful disclosure entity for failing to make fair disclosure of forecasts or projections on business performance.
Attention is on whether the company can address market doubts about its research capabilities and controversy over poor communication through the briefing.