Prosecutors Raid Edison Motors Amid 'Ssangyong Motor Acquisition Eat-and-Run' Controversy

Financial Supervisory Service Transfers Case via Fast Track Last Month

The Joint Securities Crime Investigation Unit, which investigated securities and financial crimes, officially relaunched on the 1st after about a year and a half since its abolition, with a new name. The photo shows the building directory installed in the lobby of the Seoul Southern District Prosecutors' Office annex on that day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Yoo Byung-don] On the 9th, the prosecution conducted a search and seizure of Edison Motors, which has been embroiled in a controversy over embezzlement during the failed acquisition of Ssangyong Motor.

According to the prosecution, the Joint Investigation Team for Financial and Securities Crimes of the Seoul Southern District Prosecutors' Office carried out the search and seizure on Edison Motors and its affiliates on the same day.

Last year, Edison Motors, the preferred bidder for the acquisition of Ssangyong Motor, failed to pay the acquisition price, resulting in the final collapse of the acquisition. During this process, allegations arose that the major shareholder artificially inflated the stock price and realized profits.

At that time, Edison Motors acquired SemiSysco (now Edison EV), a KOSDAQ-listed company, to acquire Ssangyong Motor. Subsequently, Edison EV's stock price surged more than fivefold from 9,230 KRW in June last year to 46,600 KRW. Fueled by consecutive positive factors such as a free capital increase and being selected as the preferred bidder for the Ssangyong Motor merger and acquisition, the stock price even rose to an intraday high of 82,400 KRW in November of the same year.

As a result, the merger was canceled because Edison Motors failed to pay the remaining acquisition funds. Following this news, Edison EV's stock price hit the lower limit in March, and in May, eight creditors filed for bankruptcy with the court but later withdrew the application.

Last month, the Financial Supervisory Service detected allegations of unfair trading under the Capital Markets Act by Edison Motors and referred the case to the Seoul Southern District Prosecutors' Office. It is known to be the first fast-track (rapid investigation transfer) case since the appointment of Kim Bok-hyun as the head of the Financial Supervisory Service.

Meanwhile, the prosecution plans to analyze the materials secured during the search and seizure to verify the background of Edison Motors' attempt to acquire Ssangyong Motor through Edison EV, as well as whether company officials or major shareholders engaged in unfair trading practices.