SEOUL, November 04 (AJP) - South Korean prosecutors carried out additional raids on Korea Zinc and securities firms involved in the company’s stock issuance plan, widening an investigation into alleged violations of capital market laws.
A joint investigation team of the Seoul Southern District Prosecutors’ Office, led by Chief Prosecutor Kim Jin-ho, searched Korea Zinc’s headquarters and other locations on Tuesday, seizing computers and internal records.
Investigators also raided the offices of Mirae Asset Securities, the lead underwriter, and KB Securities, a co-underwriter, as well as certain departments at Hana Bank.
The probe centers on allegations that Korea Zinc, one of the world’s largest zinc smelters, may have engaged in unfair trading practices related to its 2.1 trillion won ($1.5 billion) stock issuance plan announced on Oct. 30 last year, shortly after a share buyback.
Authorities suspect the firm may have concealed plans to use the new share sale to finance the earlier buyback. Mirae Asset is reported to have begun due diligence for the offering on Oct. 14, despite Korea Zinc’s public statements that it had no plans to alter its financial structure following the repurchase.
The Financial Supervisory Service, citing concerns over possible investor confusion, ordered Korea Zinc to revise its securities filing, prompting the company to withdraw the issuance on Nov. 13. The Financial Services Commission later referred the case to prosecutors, citing potential violations of capital rules.
Tuesday's searches follow earlier raids in April, when prosecutors seized documents from six corporate offices — including Korea Zinc, Mirae Asset, and KB Securities — and five residences linked to the case.
Prosecutors are examining whether executives at Korea Zinc or its financial partners coordinated to mislead investors or profit from undisclosed information ahead of the planned stock sale.
Korea Zinc shares closed down 3.07 percent, or 32,000 won, at 1,011,000 won on Tuesday.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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