The Fair Trade Commission 공정거래위원회 (FTC) said Thursday that it has fined Celltrion Holdings 셀트리온홀딩스 for not holding enough stocks of its subsidiary Celltrion 셀트리온.
Korean law dictates that a holding company must have at least 20 percent of the shares issued by the subsidiary if it is a listed corporation, and 40 percent of the shares if the subsidiary is a non-traded company.
Celltrion Holdings will pay 2.4 billion won ($1.7 million) in fines and have six months’ time to rectify the problem.
Celltrion Holdings started out with a 20 percent stake in Celltrion after turning into a holding company in 2010. However, Celltrion Holding’s stake in their subsidiary dropped to 19.91 percent as convertible bonds it issued overseas turned into foreign equities in April 2015.
Under the law, the company had a one-year grace period to regain the 20 percent shares of their subsidiary. However, the company failed to regain their 20 percent after the grace period officially ended on April 26, 2016, due to lack of funds. The holding company has not yet met the required share limit and only holds 19.91 percent of their subsidiary’s stocks.
“Celltrion Holdings has been consistently buying Celltrion stocks since its equity fell below the legal limit,” a company official told Korea Biomedical Review. “We expect to reach the legal share limit by the end of this year.”
If Celltrion Holdings fail to reach the legal share limit after six months, FTC can file a complaint with the prosecution for failing to follow the corrective order.
<© Korea Biomedical Review, All rights reserved.>