South Korea will send a team of investigators to the Hong Kong branch of Deutsche Bank’s securities unit as part of a probe into allegedly unfair stock transactions, officials said yesterday.
South Korean Financial Supervisory Service (FSS) Governor Kim Jong-chang told journalists that the move was part of an investigation into suspected involvement of the securities unit in a heavy sell-off of South Korean stocks last month.
On Nov. 11, the benchmark KOSPI fell 2.7 percent, dropping steeply in the last half-hour of trade as selling by foreign investors overwhelmed the market, and the watchdog launched an inquiry.
“They will go to Hong Kong to meet with those who were concerned with the issue,” Kim was quoted as saying by Yonhap Infomax financial service. “We are investigating whether there were any wrongdoings.”
A senior official of the FSS told reporters that it was investigating whether the Hong Kong branch of Deutsche Bank’s securities unit had been involved in “unfair transactions” — an offence under South Korea’s business laws.
“We are investigating whether the securities unit was involved in unfair transactions,” the official said on condition of anonymity, declining to elaborate.
The FSS said last month that foreign investors’ net sales on Nov. 11 totaled 1.34 trillion won (US$1.2 billion), with about 1.6 trillion won in sales coming from Deutsche Bank.