SillaJen under review for delisting

Korea Exchange will review whether to delist biotech company SillaJen Inc. due to the indictment of embezzlement and breach of trust charges against its officials.

Company executives were suspected of avoiding massive losses by selling large amounts of stocks ahead of its regulatory filing in August 2019, using inside information that its key product Pexa-Vec failed clinical tests.

Prosecutors also suspect that former Sillajen CEO Moon Eun-sang acquired a stake in the company without any capital by taking over bonds with warrants.

Moon resigned last week as Sillajen CEO after a warrant of arrest was issued against him by the Seoul Southern District Court for using undisclosed information to sell SillaJen stocks and committing other irregularities.

The resignation was also perceived as a means to help SillaJen avoid a delisting.

Top managers’ alleged embezzlement can be a basis for a company to lose eligibility for listing on the stock market.

KOSDAQ has suspended trading of SillaJen stocks since May 4.