(Photo: Captured from Edison EV website)



"We plan to negotiate with creditors."
"Fear of insolvency is low."

Edison EV, which was attempting to acquire Ssangyong Motors, has filed for bankruptcy.

Edison EV announced on the 4th that eight creditors have filed for bankruptcy against Edison EV at the Suwon District Court.

According to the public notice, eight creditors filed for bankruptcy with the court on the 3rd, seeking a decision to declare Edison EV, the debtor, bankrupt for a debt of 3.6 billion won.

Edison EV said it would "negotiate with creditors" and "respond in accordance with legal procedures through its litigation attorney."

Under Korea Exchange regulations, a bankruptcy decision for a KOSDAQ-listed company constitutes a formal delisting. Accordingly, if a bankruptcy declaration or other grounds for dissolution arise, the company is immediately delisted without any objection procedures.

Edison EV previously received a disclaimer of opinion from an external accounting firm on its financial statements last year, but failed to submit a statement resolving the issue, resulting in delisting as early as April. Edison EV filed an objection last month and was granted a grace period until April 10, 2023.

Edison EV is a listed company acquired by Edison Motors to raise funds for the acquisition of Ssangyong Motors. However, the contract was terminated as the Edison Motors consortium failed to fulfill its obligation to deposit the remaining acquisition price by the deadline stipulated in the investment contract.

An Edison EV official explained, “The conditions for declaring bankruptcy must be cases of excess debt or insolvency,” and “The company has submitted consent forms from most creditors not to demand a lump sum repayment due to loss of time-bound interest, so the risk of insolvency is significantly low, and since debt does not exceed assets, both conditions are unlikely, so it does not meet the conditions for declaring bankruptcy.”

Edison EV has since been embroiled in a controversy over alleged "dine-and-dash" by its major shareholders. The stock price soared when the Ssangyong Motor acquisition contract was signed, and during this period, major shareholder investment groups, including DMH, sold most of their shares and capitalized on the gains. Financial authorities are investigating whether this alleged "illegal trading" occurred.

The Korea Exchange and the Financial Supervisory Service are investigating whether there were any unfair practices in the process of disposing of Edison EV's major shareholders' equity by investment associations. At an executive meeting on the 4th, FSS Governor Jeong Eun-bo stated, "We will conduct a preliminary review of matters with a high possibility of evading disclosure obligations, such as the acquisition of shares through multiple investment associations."