SEOUL, KOREA - CJ Group company shares have been in free fall for almost a month since May 21 when news that CJ Group chairman Lee Jay-Hyun has allegedly created paper companies in overseas tax havens for parking slush funds. According to the Korea Exchange on June 18, the share price of CJ Corp., the group's holding company, has fallen 15 percent for 20 trading days between May 21 and June 17. On the 18 at 1:27 pm, CJ Corp. was traded at 116,500 won.
As late as March this year, CJ Corp.'s share price had gone up to a record-high level on expectations that the company's overseas expansion spree. Since that time, however, the price has kept heading south due to the adverse news.
Park Seon-ho, analyst with Meritz Securities, said, "The current share price of CJ Corp. is a 41-percent discount to its net asset value. Previously its discount rate used to be at the level of 20 percent."
As the group chairman is scheduled to appear at the prosecutor's office next week, market analysts see the group's share prices would go further down for the time being.
Kiwoom Securities analyst Park Jung-seon said, "Currently there are talks of replacing the top management. If that happens, the overseas projects initiated by the current chairman will suffer and share prices will go down as well. Once CJ could normalize its operations at home and foreign markets, its share prices would recover. But risks still remain."
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