Financial Services Commission chief Shin Je-yoon said the FSC will consider disclosing data on short selling positions after a case involving the largest KOSDAQ-listed firm stirred controversy over short selling.

Shin also said he will “put (his) neck on the line” for the privatization of Woori Financial Group to take place early during the Park Geun-hye administration.

Celltrion CEO Seo Jung-jin said Tuesday he will sell off his entire controlling stake in the nation’s largest biotech company on KOSDAQ by market cap to protect the firm from short selling by speculative investors, blaming the financial authorities for turning a blind eye.

Seo claimed that Celltrion has been under attack from investors who deliberately distort prices by spreading false information and gained profits through short selling.

While remaining cautious about attributing Celltrion’s stock price fall to short selling, Shin said the FSC will consider expanding the regulatory filing on the process as constant short selling could raise the possibility of unfair transactions.

“Korea has tight regulations on short selling, so I don’t think (short selling) can have enough impact to deliberately bring down stock prices,” Shin said during a dinner meeting with reporters on Thursday.

“But if it goes on for a considerable period of time, there could be chances of unfair transactions.”

Under current rules, investors short selling more than 0.01 percent of total issued stocks are required to report their short selling positions to the Financial Supervisory Service. The Korea Exchange can ban short selling of a KOSDAQ-listed firm’s stocks if more than three percent of its entire traded volume is sold short in 20 days.

The FSS reviews the data on short selling positions for supervisory purposes, but does not disclose it.

Many other countries are moving towards indirect regulations including public disclosure of short selling positions for investors’ knowledge, according to Kim Jae-dong, an FSC official in the capital markets division.

As for the government’s plan to privatize Woori Financial Group, which has failed three times due to a lack of interested investors, Shin said it should be accomplished as soon as possible before it loses momentum towards the end of the Park administration.

Shin also said “someone with a strong determination for privatization” was desirable as the new chairman of Woori Financial to replace Lee Pal-seung who offered to resign on Sunday.

Shin said the four financial task forces will focus on improving the financial supervisory system and the governance of financial companies as well as revamping policy finance and pushing for privatization of Woori in the first half of this year.

“The FSC and the FSS will not participate in the taskforce assigned with improving the financial supervisory system. We have asked (the task force) to be as neutral as possible,” Shin said.

The government also plans massive policy financing to enlarge the size of the country’s venture capital to a “surprising level,” he said.

By Kim So-hyun (sophie@heraldcorp.com)