[Exclusive] "Why Is Only My Stock Not Rising?" The Reason Revealed... Suspicions of 'Stock Price Suppression' Mocking Government Policy [Wealth Succession] Intops②

If the Share Price Rises 30%, Intops Can Redeem the EB
Designated Four Times as a "Short Sale Overheated Stock" After EB Issuance, Limiting Price Gains
Meanwhile, Owner’s Second Generation Increases Holdings, Defying Government’s "Stock Price Su

Geunha Kim, CEO of Intops.

Intops, a KOSDAQ-listed company, has effectively encouraged short selling by attaching a call option—which caps share price gains—to its exchangeable bonds (EB). Last year, the Lee Jaemyung administration called for the cancellation of treasury shares as part of domestic stock market value-up measures. However, it has come to light that Intops was instead using its treasury shares to suppress the stock price, during which time the owner's second-generation heir purchased shares.

According to the Financial Supervisory Service's electronic disclosure system on June 8, Intops issued its first exchangeable bonds (EB) in October last year, totaling 13 billion won. The shares subject to exchange are 630,792 treasury shares of Intops. The exchange price is 20,609 won per share and the interest rate is 0%. The absence of interest implies that investors aim to profit from the stock price appreciation.

However, this EB includes an unusual call option. If Intops' share price exceeds 130% of the exchange price for 10 consecutive trading days, Intops can redeem the EB from investors by paying only 0.1% interest.

If Intops' share price remains above 26,792 won—which is 30% higher than the exchange price—for ten days, the structure effectively prevents investors from making a profit. Considering opportunity costs, investors may even incur a loss. Investors can maximize returns only if Intops' share price fluctuates between 20,609 won and 26,792 won. If the share price rises too much, there is an incentive for investors to suppress it through short selling.

In fact, following the issuance of the EB, Intops was designated by the Korea Exchange as a "short selling overheated stock" four times over about seven months from early November last year until last month. There had not been a single designation before the issuance of the EB. On numerous trading days, the proportion of short selling out of daily trading volume also exceeded 10%.

This has led the market to question why Intops issued EB despite having ample liquidity. As of the end of the third quarter last year, Intops held 44.9 billion won in cash and cash equivalents and 233.2 billion won in other financial assets.

According to a representative of Intops, "The purpose of issuing the EB was to secure investment funds for new business initiatives and for mergers and acquisitions (M&A) to drive future growth. The funds raised are being managed properly in accordance with the publicly disclosed purposes." However, to date, Intops has not used the capital raised from the EB for business-related investments and is simply holding the funds.

Some have voiced concerns about the fact that, in a situation where stock price gains are curbed by the EB, Geunha Kim, CEO of Intops and the owner’s second-generation successor, has been continuously purchasing shares through the family company, Platel. This could be seen as a direct challenge to the value-up direction promoted by the Lee Jaemyung administration for the domestic stock market.

At the time of Intops’ EB issuance, the Lee Jaemyung administration and the ruling party were pushing for amendments to the Commercial Act that would require the cancellation of treasury shares as a value-up measure for the domestic stock market. President Lee also pointed out the practice of artificially depressing stock prices to save on inheritance taxes, and called for a swift revision of relevant laws. In February, President Lee emphasized, "The top priority for follow-up legislation after the Commercial Act amendment is the law to prevent stock price suppression."

Nevertheless, Intops issued EB without canceling treasury shares and attached a call option that encouraged short selling. Furthermore, while the share price was low, a company related to the second-generation owner purchased shares. This means Intops engaged in all the practices the government has cited as causes of the "Korea Discount."

In response, a representative of Intops stated, "As for the call option, it is customarily granted so that institutional investors can quickly realize profits once the stock price rises to a certain level. The EB issuance was a legitimate means of raising capital for corporate investment, and we had no involvement in short selling or related activities."

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