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Photo= Korea Investment & Securities |
[Alpha Biz= Reporter Kim Sangjin] Korea Investment & Securities (KIS), the lead underwriter and investor in A-Lux, is facing criticism after selling a large portion of its shares on the day of A-Lux's IPO. The company had invested in A-Lux before it went public and was involved in setting the inflated offering price, leading to accusations of a conflict of interest.
On the 1st of November, A-Lux's IPO day, a specific institutional account, reportedly linked to KIS, sold 339,500 shares, which accounts for 2.56% of the company's total shares. The Korean Stock Exchange raised concerns over this high volume of trading, designating A-Lux as a "cautionary" stock on the 4th of November.
KIS had acquired 485,000 shares (3.66% of the company) during A-Lux's pre-IPO financing round in February 2020, at a price of 3,600 won per share. This is significantly lower than the IPO price of 16,000 won per share, which is more than four times the price KIS paid. The sale of the non-restricted shares (2.56%) on the IPO day has raised questions about whether KIS inflated the offering price to benefit from a quick profit, leading to concerns over ethical practices and potential conflicts of interest.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
