Switzerland-based elevator manufacturer Schindler Holding AG’s recent stake sale snafu in Hyundai Elevator is escalating doubts about its yearslong attempt at a hostile merger and acquisition of the Korean company, industry sources said Sunday.

The second-largest shareholder of Hyundai Elevator has reportedly filed a regulatory filing to make it look like it is selling a large number of shares when in fact, it only sold a small portion of its stake.

The Swiss company announced last Monday it sold a total of 90,119 shares in Hyundai Elevator, decreasing its stake by 5.53 percentage points to 15.95 percent, compared to the 21.48 percent stake it held in 2015.

Following the unexpected announcement, Hyundai Elevator's stock price spiraled and hit an all-time low of 37,600 won ($28.60) apiece at one point on Sunday for the first time since May 10, down by 10 percent compared to the last trading day.

Facing grievances from retail investors, Schindler on Tuesday explained the stock sale was meant to make a return on investment, not an exit strategy. “We will maintain our shareholder position by holding a stake above 10 percent,” it said.

Industry insiders claim Schindler intentionally misled the public, suggesting that there had been a major change in ownership after selling its shares to induce a plunge in Hyundai Elevator’s stock price.

“Schindler created an illusion of selling off a 5.53 percent stake by comparing its recent stock trading to that of eight years ago,” said a source close to the matter. “However, it actually sold around a 0.2 percent stake.”

The source stressed that if Hyundai Elevator’s stock price falls, it gives Schindler an upper hand, as it has been seeking a hostile takeover of the company.

In April, the second-largest shareholder won a decadelong suit for damages against Hyundai Elevator. The Korean company paid around 200 billion won, after taking out an expensive loan from M Capital. Due to high interest rates, Hyundai Elevator CEO Hyun Jeong-eun is likely to face financial constraints in defending her ownership of the company, sources said. As of March, Hyun and other shareholders favorable to her owned a combined 26.57 percent stake in the company.

Major shareholders usually trade their sales in a block deal through a particular trading window because their sizeable stake purchase or sale could affect other investors.

“We cannot rule out the possibility of the company working with short sellers or private equity firms,” another source said, adding that a plunge in the stock price was a win-win for both short sellers and Schindler.

Experts also suspected Schindler of deliberately interrupting Hyundai Elevator’s ongoing turnaround efforts.

“Hyundai Elevator has been striving to improve profits. For instance, it recently secured a 60 billion won mega deal to supply elevators for the reconstruction project of Dunchon Ju-gong Apartment (in Seoul),” said Kim Dae-jong, a business professor at Sejong University. “But Schindler’s recent stunt can be interpreted as a negative signal that could stall Hyundai’s growth momentum.”

“For Schindler, South Korea’s elevator market counts as an attractive investment opportunity. The company is highly likely to continue making attempts to take over the Korean rival,” Kim added.

According to Public Data Portal, the number of elevators installed nationwide came to 811,602 as of 2022. Data from the Elevator Safety Technology Institute showed South Korea ranked seventh in the world for number of installed elevators in operation.