[News Space=Reporter seungwon lee] As E-Mart pursued a public offering to incorporate its subsidiary Shinsegae Food as a wholly owned subsidiary and voluntarily delist it, the trading volume immediately before the announcement increased abnormally, sparking controversy over insider trading.

On the 12th, Shinsegae Food's trading volume reached 349,157 shares, its highest level since January 8th of this year, reaching 16 times the daily average of 21,000 shares. While the overall KOSPI trading volume on the day was similar to the recent monthly average, Shinsegae Food's trading volume soared, raising suspicions of insider trading.

The tender offer price is 48,120 won per share, representing a 20% premium over the closing price (41,000 won) on the 12th (the business day before the announcement). Through this tender offer, E-Mart plans to acquire all outstanding shares, securing a 93.36% stake. The total tender offer price is approximately 70.6 billion won. Shinhan Investment & Securities is the lead underwriter.

Controversies surrounding front-running trading prior to the announcement of a public offering have recurred. In January of this year, the Financial Supervisory Service reported and reported to the prosecution a case involving front-running trading using undisclosed material information related to a public offering by a listed company. Shareholders in the Shinsegae Food stock discussion forum expressed their discontent, saying, "It's not only frustrating that the public offering is being conducted at a price less than 1x the price-to-book ratio (PBR), but it's also infuriating that someone leaked information and pressured the stock price to buy in advance."

Through this public offering, E-Mart is seeking to simplify its governance structure and avoid internal transaction regulations. Shinsegae Food's internal transaction ratio is projected to reach 37% as of 2024, significantly higher than its competitors CJ Freshway (8.9%) and Hyundai Green Food (3.6%). As a wholly owned subsidiary of Shinsegae Food, which is subject to the Fair Trade Commission's oversight, it is expected to be significantly freed from internal transaction regulations. The distribution industry expects Shinsegae Food to serve as a dedicated factory for E-Mart, helping to reduce costs and protect profits.

This public offering is part of E-Mart's efforts to improve management efficiency and restructure its business. It aims to free itself from the pressures of listing maintenance costs and performance fluctuations, and to pursue a mid- to long-term restructuring. However, the controversy surrounding front-running trading, fueled by a surge in trading volume before the announcement, has raised concerns that the Capital Markets Act requires stronger oversight of the use of undisclosed material information.