SEOUL, Sep. 25 (Korea Bizwire) – A study said that the so-called vulture capitalists have enriched themselves with a profit of 130 billion won for the past three years by taking over 15 firms with no capital investment.
As of the end of July this year, a total of 500 billion won in market value has disappeared with seven companies delisted or in the process of delisting because of takeovers by these vultures.
According to the Financial Supervisory Service on September 24 based on 15 cases of unfair practice, the vultures took profit in a variety of ways including violation of disclosure rules (13 cases), embezzlement and dereliction of duty (10), illegal transaction (9), price manipulation (5), and use of confidential information (4).
As for the number of those involved in misconduct, individuals took the largest number at 166, followed by private moneylenders (20), corporations (20), stock investment news casters (2), and public accountants (2).
The main targets of the vulture capitalists were those firms with high cash balances or those with low market cap. The Financial Supervisory Service said the main purposes of no-money-down takeover by the vultures were to embezzle company assets (5 cases) and to earn trading profit from stock selling (10).
In many cases, these vultures borrowed funds with the shares of the company to acquire and its assets as collateral after negotiating with the owner. Afterward, they inflated the stock price by manipulating the price through spreading unfounded rumors.
By Sean Chung (firstname.lastname@example.org)