The Seoul Southern District Court on Tuesday issued an arrest warrant for Sillajen CEO Moon Eun-sang on charges of using undisclosed information to sell his company’s stocks and committing other irregularities.
The court cited “possible flight risk and destruction of evidence” as reasons for Moon’s arrest. The arrest comes after the prosecution pressed charges against Moon last Friday for violating the laws governing the capital market and financial investment.
Moon is under suspicion of avoiding massive losses by selling large amounts of stocks using inside information on the suspension of the clinical trial of Pexa-Vec, an oncolytic viral therapy candidate for liver cancer. Prosecutors also suspect that Moon unfairly acquired a stake in the company without any capital by taking over bonds with warrants (BWs) through a paper company.
With the arrest of Moon, Sillajen, once one of the most prominent biopharmaceutical companies in Korea, faces a possible delisting from the stock market.
The Korea Exchange plans to decide whether to review the company for delisting on May 29. If the KRX puts the company under a review for delisting, Sillajen will have to submit a management improvement plan within 15 days. Afterward, the corporate review committee will rule whether to kick the firm out of the secondary Kosdaq market before July 17.
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