President Lee Jae-myung raised concerns about potential stock manipulation related to the issuance of exchangeable bonds by KOSDAQ-listed Inaps.
On June 8, he shared a related article on his X (formerly Twitter) account, questioning, "Isn't this stock manipulation?" According to a report by Asia Economy, Inaps issued 13 billion won (approximately $10 million) in exchangeable bonds last October, which included a call option allowing the company to redeem the bonds if its stock price exceeded a certain level. Critics argue that this structure could incentivize investors to short-sell, thereby limiting stock price increases.
According to the Financial Supervisory Service's electronic disclosure system, Inaps issued the 13 billion won exchangeable bonds last October, with 630,792 of its own shares as the exchange target. The exchange price was set at 20,609 won, with an interest rate of 0%.
The issue arises from a clause that allows the company to redeem the bonds at face value if the stock price exceeds 130% of the exchange price for ten consecutive trading days. This creates an incentive for investors to keep the stock price within a certain range rather than allowing it to rise significantly, potentially leading to short-selling to suppress the stock price.
In fact, Inaps was designated as a stock subject to short-selling restrictions four times in the seven months following the bond issuance. Prior to this, it had never been classified as such.
Market analysts have criticized this structure as being contrary to the government's efforts to address the 'Korea Discount' and promote value enhancement policies. President Lee has previously highlighted the need for legislation to prevent artificial stock price suppression, citing concerns over inheritance tax burdens. His recent comments suggest he is directly questioning the implications of this situation.
* This article has been translated by AI.
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