KRX may label SK Bioscience as 'unfaithful disclosure corporation'

The Korea Exchange (KRX) announced on Thursday that it  may designate SK Bioscience as an unfaithful disclosure corporation due to its failure to follow disclosure obligations.

The stock market regulator said SK Bioscience disclosed its influenza vaccine supply contract worth about 25.8 billion won ($20.2 million) with the Korea Public Procurement Service on Wednesday, despite signing the agreement last Thursday. The contract amounted to 5.64 percent of SK Bioscience's sales of 456.7 billion won in 2022.

The KRX said the company has until June 26 to file an objection in accordance with relevant laws.

The regulator will decide, after deliberation by the KRX Listing and Disclosure Committee, whether to designate SK Bioscience as an unfaithful disclosure corporation and whether to impose penalty points and disclosure violation sanctions.

However, if there is no appeal, the motive of the violation is not intentional or gross negligence, the significance of the violation is low, or there has been no violation of disclosure obligations in the past year, the Listing and Disclosure Committee deliberation may be omitted.

SK Bioscience's cumulative penalty score for the past year was zero. If the penalty score becomes 10 or  higher, the KRX will suspend trading for one day.

"We will re-disclose the specific outcome, including whether or not the company will be designated as an unfaithful disclosure corporation, as soon as it is finalized," the KRX said.

Regarding the matter, SK Bioscience said the delayed disclosure was due to a simple mistake by a company official.

"In 2020, when the company last produced and sold flu vaccines, drug wholesalers participated in the bidding, but in 2021, the procurement method changed to direct bidding by manufacturers," the company said. "The company restarted to participate in the tender for the flu vaccine this year. This led to a delayed disclosure by our employee."

Regarding why it took about a week to disclose, the official stated that the time the company realized the mistake was Tuesday when the Korea Disease Control and Prevention Agency (KDCA) distributed the press release on influenza vaccine procurement for 2023-2024.

"The department in charge recognized the content and immediately made the disclosure," the official said. "We are currently making a sufficient explanation to the KRX and plan to comply with the procedures requested by the agency in the future."