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Lee Dong-che (left), the founder and chairman of EcoPro, the holding company of EcoPro BM, speaks in September last year when the company announces a plan to expand local facilities EcoPro BM Co., South Korea’s leading battery material producer, considered resignations of key executives, including its holding company’s chairman, sources said, as local prosecutors investigated allegations of insider trading, dampening their stocks.EcoPro BM, the second-largest company by market capitalization on the country’s junior Kosdaq, lost 4.07% to close at 325,600 won ($271.1) on Monday, far underperforming a 0.2% dip in the index. Its holding company EcoPro Co. also tumbled 5.3%.Both stocks declined more than 20% respectively since Jan. 26 when The Korea Economic Daily exclusively reported that EcoPro BM, the country’s top cathode material manufacturer, was under probe by local prosecutors for allegations of insider trading.Key executives including Lee Dong-che, the founder and chairman of EcoPro, the holding company of EcoPro BM, were known to be booked as suspects. The Financial Services Commission fast-tracked the investigations after the regulator became aware of the allegations. The regulator usually takes such steps when it is concerned that key suspects could destroy evidence.CHAIRMAN READY TO DO ANYTHING FOR COMPANYForeign investors dumped a total of 116 billion won worth of EcoPro BM stocks in the six sessions to Monday, while local institutional investors sold 40.6 billion won during the period.Pressures mounted on EcoPro BM from shareholders to boost stock prices with institutional investors urging swift measures.The company was mulling a major reshuffle of executives with Lee stepping down since a possible indictment of the chairman is expected to cause troubles to the company’s management, industry sources said.EcoPro BM has few options currently to bolster share prices since it already set up plans for production expansions. It is unlikely to win a major order from battery makers, while a potential share buyback is not expected to lift stock prices much as the company lost confidence among investors.“The chairman Lee said he will do anything for the company,” said an EcoPro BM source. “It is true that we have few options to raise shareholders’ value except a management overhaul.”Some analysts predicted further falls in EcoPro BM’s share prices, given expected indictments and trials of executives, while others said the recent declines in the share prices were excessive. EcoPro BM’s 12-month forward price-to-earnings ratio fell to 40 times from 47 times a year earlier.By Yun-Sang Kokys@hankyung.comJongwoo Cheon edited this article.
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