Dong Sung Bio Pharm, known for its stomach medicine "Jeongro-hwan" and hair dye "Seven Eight," applied for corporate rehabilitation procedures (court receivership), leading to the suspension of stock trading on the 7th. Before the Korea Exchange halted trading of Dong Sung Bio Pharm, the stock price dropped to the limit.
Dong Sung Bio Pharm disclosed that it applied for the commencement of rehabilitation proceedings at the Seoul Bankruptcy Court immediately after the market closed that day. The reason for the application was explained as being to normalize management and preserve the value as a going concern.
On that day, just before the market closed, the Korea Exchange's Main Board for Securities requested a public disclosure regarding Dong Sung Bio Pharm's application for commencement of rehabilitation proceedings and suspended trading from 3:19 p.m. As news spread through the media that Dong Sung Bio Pharm had applied for court receivership, the stock price hit the lower limit.
Dong Sung Bio Pharm, boasting nearly 70 years of history, suddenly applied for court receivership, which is interpreted as being related to the recent change in its largest shareholder. Chairman Lee Yang-gu, the largest shareholder and a second-generation manager of Dong Sung Bio Pharm, suddenly transferred his stake to the marketing company Brand Refactoring last month.
Dong Sung Bio Pharm is currently led by Na Won-kyun, a nephew of Chairman Lee. The company stated that the sale of the chairman’s equity was a decision made without prior consultation with Na. As a result, there are predictions of a management rights dispute between Chairman Lee and Na.
Meanwhile, Kyobo Securities was highlighted at the top of the trading window for Dong Sung Bio Pharm on that day. After the report of Dong Sung Bio Pharm's application for court receivership, Kyobo Securities made large-scale net purchases as the stock price fell.
However, as the stock price decline deepened, it fell to the limit, and trading was suspended just before the market closed. Kyobo Securities sold some volume in response to the significant drop, but it was unable to completely unwind the volume it had purchased during the day.