Seojin System CEO Returns to Korea as Stick Credit Buys KRW 129.3B Stake

Stick Investment Credit Division (Stick Credit) purchased 2.5 million shares of KOSDAQ-listed Seojin System from CEO Jeon Dong-gyu for KRW 129.3 billion on July 10, according to Financial Supervisory Service disclosures on July 12. The transaction occurred on the same day CEO Jeon returned to Korea after travel restrictions in Vietnam due to tax issues. Market observers note the timing raises questions about potential undisclosed material information use, as the CEO's Vietnam travel restrictions were not publicly disclosed before prior profit settlement transactions with securities firms.

Stick Credit Acquires Seojin System Shares at 9.2% Premium

The transaction involved Stick Credit's special purpose vehicle Stick Sequoia Holdings purchasing shares at KRW 51,700 per share, representing a 9.2% premium over the closing price on July 10. CEO Jeon disclosed the transaction purpose as "company funding" in regulatory filings. The deal included downside protection mechanisms, with Stick Credit receiving 3.5 million shares owned by CEO Jeon as collateral and an internal rate of return guarantee of approximately 12%. CEO Jeon reportedly received call options allowing him to repurchase the shares at a predetermined price in the future.

FSS Requests Explanations from Securities Firms on Prior Transactions

The Financial Supervisory Service requested explanations from Shinhan Investment Securities and Hana Securities regarding profit settlement transactions they conducted with CEO Jeon. The regulatory inquiry focuses on whether the CEO's Vietnam travel restrictions and related tax risks constituted undisclosed material information during earlier transactions. CEO Jeon had been subject to travel restrictions in Vietnam due to tax payment issues during a local tax investigation, information that was not publicly disclosed when he settled profits with securities firms based on stock prices that had not yet reflected these risks.

FAQ

What stock transaction did Stick Credit complete on July 10? Stick Credit purchased 2.5 million Seojin System shares from CEO Jeon Dong-gyu for KRW 129.3 billion at KRW 51,700 per share, a 9.2% premium over the closing price.

Why is the Financial Supervisory Service reviewing prior transactions? The FSS requested explanations from Shinhan Investment Securities and Hana Securities because CEO Jeon's Vietnam travel restrictions due to tax issues were not publicly disclosed when he conducted profit settlement transactions with these firms, raising questions about potential use of undisclosed material information.