Kolon TissueGene investors bite nails as authorities due to deliver ruling on stock

More than 60,000 minority investors of Kolon TissueGene are keeping their fingers crossed as they await the de facto final decision to the fate of the stock that had been suspended since May 2019 late Monday.

According to the Korea Exchange, two meetings – Corporate Review Committee and Kosdaq Market Committee – would take place in the afternoon of Monday to decide whether to remove the stock from the market or give a second chance. The Corporate Review Committee will review the stock’s listing eligibility against suspension caused by embezzlement and breach of trust in July 2020.

The Kosdaq Market Committee decides whether to delist the stock in light of Invossa-K (abbr. Invossa), the company’s gene therapy for osteoarthritis, which was canceled by Korean health authorities in May 2019. The committee’s decision is final and irrevocable.

A decision from the Corporate Review Committee can be contested and its potential decision for delisting is subject to review by the Kosdaq Market Committee within 20 days.

This means the company’s stock trading resumption is possible from Tuesday only when both committees conclude the stock viability.

The case with Kolon TissueGene's delisting review process is complicated as it deliberates separate issues of Invossa cancellation and embezzlement.

The Kosdaq Market Committee will review the company’s listing eligibility on the ground that the license for Invossa was canceled after the ingredients were found to be different from those approved by authorities. In August 2019, the Corporate Review Committee concluded delisting, but the Kosdaq Market Committee gave a one-year grace period in Oct. 2020.

Separately from this case, the Corporate Review Committee will deal with a case of 2.7 billion won embezzlement by a former executive in July 2020. The embezzlement case added another reason to blacklist Kolon TissueGene.

The Corporate Review Committee held in August of last year granted a one-year period for improvement, which ended at the end of August this year.

If a delisting decision is granted by the Corporate Review Committee, the Korea Exchange will hold a Kosdaq Market Committee meeting within 20 days to proceed with one of three options: stay trading, delisting, or another one-year grace period for improvement. However, if the Kosdaq Market Committee decides delisting regardless of a decision from the Corporate Review Committee, the delisting process begins immediately without any appeal.

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