KleanNara Chairwoman Choi Hyun-su [Korea Paper Manufacturers Association]
KleanNara Chairwoman Choi Hyun-su [Korea Paper Manufacturers Association]

Shares swing wildly after ex-chairman's board comeback bid fails

Stock hits upper limit Tuesday and Thursday, rises double digits Friday

Investors focus on founding family's stakes and control of company

Shares of KleanNara surged Friday even as South Korean stocks broadly plunged on fears that AI regulation could tighten following US midterm election results, with investors zeroing in on a potential ownership dispute within the tissue and paper maker's founding family. Volatility in the stock has intensified since a bid by former Chairman Choi Byung-min to return to the board was voted down.

KleanNara rose more than 20 percent during morning trading on the Kospi on Friday, posting double-digit gains even as selling pressure weighed on the broader market.

The stock had already hit its daily upper limit on Tuesday, surging 29.95 percent, before falling more than 14 percent on Wednesday after shareholders rejected Choi's nomination as an inside director at an extraordinary general meeting. It then rebounded sharply on Thursday, closing up 29.93 percent at the upper limit again.

The wild swings reflect growing speculation over a potential control struggle within the founding family. At the extraordinary general meeting Wednesday, shareholders voted down a proposal to reinstate Choi as an inside director. Earlier, it emerged that Choi Jeong-gyu, an inside director and Choi Byung-min's eldest son, had voted in favor of his father's return at the board level.

As of late June, Choi Jeong-gyu held a 16.12 percent stake in the company, while Chairwoman Choi Hyun-su — the eldest daughter — held 7.70 percent. Choi Hyun-su returned as co-chief executive in August and is jointly running the company with CEO Lee Dong-yeol.

Meanwhile, circuit breakers were triggered on the domestic market shortly after the opening bell Friday, as weakness in overseas technology stocks and deteriorating investor sentiment dragged shares lower. On Oct. 15, both the Kospi and Kosdaq had fallen more than 8 percent, triggering first-level circuit breakers.


hong@heraldcorp.com