Original Korean article: DealSite
[DealSite Reporter Lee Woo-chan] Wind turbine manufacturer Unison appears to have engaged in artificial stock price manipulation. With management stock designation just five trading days away, the company closed at exactly 1,000 won. This is interpreted as an action taken by Kim Gang-hak, chairman of major shareholder Myeongwoon Industrial Development, to escape penny stock status. The Korea Exchange's KOSDAQ Market Division classifies Unison as a stock of concern for management stock designation. According to Article 53 of the KOSDAQ listing regulations, a stock is designated as a management stock when ordinary shares close below 1,000 won for 30 consecutive trading days. As of August 7, the stock had closed below 1,000 won for 25 consecutive trading days. If the stock closed below 1,000 won for five consecutive trading days starting August 10, it would be designated as a management stock.
Unison temporarily escaped the risk of management stock designation. On August 10, it recorded a closing price of 1,000 won. This bought the company one month of time until September 22. If the closing price remains below 1,000 won for 30 consecutive trading days through September 22, the stock will be designated as a management stock.
Based on trading volume and other factors on August 10, suspicions of artificial stock price manipulation have been raised. Trading volume that day reached 8.99 million shares, approximately 6 million shares more than the previous trading day on August 7. With buying pressure concentrated, the August 10 closing price rose 8.9% from the previous trading day to 1,000 won. The 8.99 million share trading volume can be evaluated as an exceptional scale. The average trading volume for seven trading days from July 30 to August 7 was only 1.95 million shares. It is interpreted that a specific force concentrated purchases in a single day on August 10, driving up the stock price.
Looking at investor trading patterns, "other corporations" net purchased approximately 4.7 million shares. On that day, individuals net sold approximately 5.59 million shares, and it is analyzed that the volume thrown by individuals was absorbed by "other corporations." The "other corporations" are estimated to be Samhae E&C, a related company of Unison's major shareholder Myeongwoon Industrial Development. Samhae E&C is an offshore wind engineering, procurement, and construction (EPC) company handling offshore construction for the Nagwol Offshore Wind Farm.
Previously, on August 5, Unison distributed a press release stating that Samhae E&C had purchased Unison shares on the market and planned additional purchases. It is observed that through concentrated purchases on August 10, the stock price was driven up. Kim Gang-hak, chairman of major shareholder Myeongwoon Industrial Development, is analyzed to have led the artificial stock price increase. Kim is the largest shareholder of Samhae E&C. As of the end of last year, Samhae E&C, a private company, recorded net cash of 35 billion won. It is also interpreted that Chairman Kim mobilized funds from Samhae E&C, where he is the major shareholder, to rescue Unison from the crisis of management stock designation.
What followed the artificial stock price increase was a sharp decline. Based on closing prices, Unison's stock fell 9.9% to 901 won on August 11 compared to the previous trading day. This completely reversed the 8.9% gain from August 10 when it closed at 1,000 won. The stock then fell more than 4% on August 12 as well. Unison's stock price again hit exactly 1,000 won on August 14 based on closing price. The company effectively bought another 30 days of time. That day, trading volume surpassed 10 million shares. "Other corporations" net purchased approximately 2.24 million shares, absorbing individual selling volume.
According to legal circles, trading patterns between 3:00 p.m. and 3:30 p.m. on August 10 and the chart show significant suspicion of artificial stock price manipulation through external force intervention. A legal industry official stated, "Besides Unison, other penny stock stocks likely made various attempts to avoid management stock designation."
DealSite inquired of Unison regarding trading volume and closing price on August 10, but received no response.
