South Korea’s sole bourse operator Korea Exchange has concluded that it will delist Kolon TissueGene, the original developer of an invalidated joint inflammation treatment named Invossa, it announced via public filing Thursday.

The KRX’s Kosdaq Market Committee held a meeting Wednesday and decided to delist the scandal-ridden drugmaker, saying it had not shown sufficient efforts to improve management.

Along with failing to achieve the proposed goals that were submitted last year, the main reason for Kolon TissueGene’s delisting -- submission of false documentation about its product -- cannot be undone, according to the KRX.

Following the decision, the firm has to decide whether or not to raise an objection within seven business days. If the biotech company appeals, the KRX committee will review its decision to delist the company.

Trading of Kolon TissueGene stocks has been suspended only two years after its market debut in 2017, as it was found to have mislabeled and made false reporting about one of the main ingredients in Invossa. Seoul’s Ministry of Food and Drug Safety revoked its permit to sell the gene therapy drug after an investigation.

Fears of retail investors losing money have been spreading fast as nearly 65,000 small-scale shareholders hold a combined 34.48 percent of the company’s shares worth 33.7 billion won ($29.75 million).

KRX’s decision has also dragged down stock prices of the company’s major shareholder Kolon Life Science, which holds 12.55 percent of shares.

Kolon Life Science’s stock closed at 30,200 won, plummeting 2,450 won, or 7.5 percent, from the previous session’s close.

Shares of its biggest shareholder firm Kolon Group, with 27.21 percent ownership, plunged 4.29 percent to 20,100 won, while Kolon Group preferred shares fell by 4.05 percent to 15,400 won, at the closing bell.

By Jie Ye-eun (yeeun@heraldcorp.com)