South Korea's largest shipping company, Hanjin Shipping's former chairwoman Choi Eun-young is under investigation for illegal insider trading. When the company this Spring came close to financial collapse, she and her daughters opted to sell all of their stock, writes the Wall Street Journal.
"As Ms. Choi and her family are suspected of having sold their Hanjin stocks by using undisclosed information to avoid losses, it's natural for the authorities to look into whether their selling violated laws," says an unnamed director at South Korea's Financial Services Commission (FSC).
South Korean authorities have calculated that if Choi Eun-young had not sold her stock for USD 2.7 million in April, she would have lost at least USD 1 million in the ensuing months.
This spring, Hanjin was hard hit by the fluctuations in global trade and expensive charter contracts for vessels. A few days after the former chairwoman's share sale, the company applied for a restructuring of its debt. In August, the company entered into receivership, leaving many vessels stranded at sea.
Choi Eun-young rejects the accusations from the FSC that she took part in insider trading based on information not available to the public. Instead, she claims that she decided to sell to pay off personal debt and that she had no idea the company was headed towards bankruptcy.