Several government officials at the Korea Customs Service are being investigated by prosecutors for alleged illegal stock trading involving duty-free shop operator Hanwha Galleria Timeworld, a news report said Wednesday.
According to Yonhap, prosecutors are probing whether the officials, who had learned Hanhwa would be the winner of bids for duty-free operators, bought Hanhwa stocks hours before the KCS announced the four winners, including Hanwha Galleria Timeworld, to run duty-free shops on July 10, 2015.
Galleria Dutyfree at the Hanwha 63 City in Yeouido, Seoul. (Korea Herald data photo)
Before the KCS’ announcement was made at 5 p.m., the stock price of Hanwha Galleria Timeworld, an affiliate of Hanwha Group, shot up by a daily limit of 30 percent to hit 78,000 won ($66.8) in the morning trading, from 64,000 won at the start of the trading.
The company’s stock price hit an all-time high of 220,500 won on July 17, 2015.
In the week of July 10 to 17, the company’s stock price more than tripled.
KCS’ officials allegedly raised about 4 million won of profit per person through illegal stock trading, Yonhap said.
As suspicions mounted over insider information leakage, the Financial Services Commission investigated the case and reported it to the Seoul Southern District Prosecutors’ Office in November.
As for why it took more than one year to investigate the case, the prosecution said, “Securing proof of using undisclosed information was difficult and the case was not on the priority list because the profits made through the leaked information was not big,” Yonhap quoted an unnamed official as saying.
Meanwhile, a KCS spokesperson said the customs office will go ahead with its previous plan to pick four more operators of duty free shops in December.
His comments came after Rep. Kim Jong-min of the main opposition Democratic Party of Korea is reportedly seeking the Board of Audit and Inspection of Korea’s audit on the KCS’ selection of five duty free shop operators made in July and November.
“The demand for an audit has not been approved by the National Assembly’s plenary session. Thus, our schedule for duty free shop biddings until next month remains unchanged,” KCS spokesman Ha Byeon-gil said.
By Kim Yoon-mi (yoonmi@heraldcorp.com)
