MEDICOX is showing weakness in early trading on the 5th. MEDICOX has decided to pursue a capital reduction with no consideration to cover its losses, following a police raid due to embezzlement and breach of trust allegations worth 10 billion won in March.
As of 9:11 a.m. on that day, MEDICOX is trading at 189 won, down 26 won (12.09%) from the previous trading day.
MEDICOX, a manufacturer of ship components, is currently under suspicion of embezzlement involving its executives. Prosecutors believe that the company's executives may have siphoned off company funds by investing approximately 10 billion won into a real estate development firm and subsequently recovering the money for personal use. The Financial Supervisory Service discovered the embezzlement allegations while conducting concentrated inspections on Korea Asset In Trust and KOREIT for unhealthy practices last year.
In addition to the embezzlement allegations, MEDICOX is also pursuing a capital reduction with no consideration. A capital reduction with no consideration involves combining issued shares, which is perceived as bad news for the stock price. MEDICOX announced that it has decided to implement a no-consideration capital increase by merging 15 common shares into 1 par value share. The record date for the capital reduction is set for the 4th of next month, and the trading suspension period will be from the 3rd to the 31st of next month.