SEOUL (Reuters) - Shares in South Korean bio-pharmaceutical firm Celltrion Inc (068270.KQ), which is up for sale, tumbled as much as 14.8 percent on Monday after reports that financial regulators are pursuing its chief executive over suspicious sharemarket trades.
Yonhap news agency and Korean broadcaster SBS CNBC said in unsourced reports that regulators had made a preliminary conclusion in the matter regarding Celltrion chief executive Seo Jung-jin at a meeting on Friday.
Seo could not be reached for comment. A Celltrion spokesman said it had not been briefed on the result of the regulator’s meeting and was preparing to make an announcement later in the day regarding market speculation.
The Financial Supervisory Service and the Financial Services Commission declined to comment.
The reports cast a shadow over Seo’s plans to seek a buyer among multinational drug makers for his controlling interest in the company, a stake worth about $1.3 billion at the current market price. Celltrion has denied rumors ranging from accounting fraud to clinical trial failures in the past, and has not been investigated previously over any alleged wrongdoing.
Shares in Celltrion, worth 4.8 trillion won ($4.4 billion), fell 8.6 percent as of 0255 GMT in heavy trade, paring earlier losses of as much as 14.8 percent which took them to their lowest level since late June.
The largest stock on South Korea’s junior bourse, Celltrion makes biosimilars, which are less expensive versions of complex biological drugs used to treat diseases such as cancer. It counts Singapore sovereign wealth fund Temasek Holdings TEM.UL among its investors.
British firm AstraZeneca Plc (AZN.L) is seen as a possible buyer of Seo’s stake. Chief executive Pascal Soriot said last month the firm was looking at ways to leverage its capacity to make biotech drugs within its MedImmune unit, including a possible move into so-called biosimilars.
But he declined to comment on whether the firm might be interested in acquiring a biosimilars business such as Celltrion.
Celltrion got European backing for its copycat version of the blockbuster rheumatoid arthritis drug Remicade in June.
A source with direct knowledge of the matter told Reuters last month that the Celltrion sale was still in the early stages.
The sale would open a door for pharmaceutical firms to expand into the growing market for biosimilar drugs. But banking industry sources have said would-be bidders are put off by mistrust of management and share price volatility.
($1 = 1087.0250 Korean won)
Reporting by Miyoung Kim and Hyunjoo Jin; Editing by Paul Tait and Stephen Coates