The Financial Supervisory Service's Capital Market Special Investigation Unit has conducted a search at the Korea Exchange regarding allegations related to L&F's disclosure of a supply contract.
On July 27, sources in the financial investment industry reported that the special investigation unit visited the Korea Exchange in Yeouido, Seoul, to secure disclosure documents submitted by L&F and related materials from the disclosure review process.
This search is part of a fact-finding investigation, and it has been reported that the Korea Exchange and its employees are not targets of the investigation.
The special investigation unit is focusing on allegations surrounding L&F's significant revision of its supply contract disclosure.
Previously, L&F announced in February 2023 that it had signed a supply contract worth 3.8347 trillion won with the American electric vehicle manufacturer Tesla for high-nickel cathode materials. The contract was set to last for two years, from early 2024 to the end of 2025.
However, just two days before the contract's expiration, on December 29 of last year, L&F issued a revised disclosure reducing the contract size to 973,316 won after the market closed. The company explained that the revision was due to changes in the supply volume.
Following the revised disclosure, investor sentiment sharply declined, leading to a 9.85% drop in L&F's stock price on the next trading day, December 30.
The special investigation unit is also reportedly examining the process of disposing of its own shares prior to the revised disclosure.
On December 2 of last year, L&F sold 1 million shares to foreign institutional investors, raising 128.1 billion won.
The special investigation unit is looking into whether L&F was aware that it would be difficult to fulfill the Tesla supply contract at that time but still proceeded to sell its shares without disclosing this information, potentially avoiding losses for the company.
* This article has been translated by AI.
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