Prosecutors Appeal Despite Heavy Sentence for Corporate Raider in 'Esmo Stock Manipulation' Case

[Asia Economy Reporter Yoo Byung-don] The prosecution has filed an appeal against Mr. Cho, who was sentenced to a heavy prison term on charges of so-called 'corporate raiding' and stock price manipulation using Lime Asset Management (Lime) funds.

According to the legal community on the 4th, the prosecution submitted the appeal to the Seoul Southern District Court Criminal Division 14 (Presiding Judge Kim Dong-hyun) on the same day. Mr. Cho was indicted last month on the 29th on charges including embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes and was sentenced to 20 years in prison and fined 30 billion won.

In June 2017, Mr. Cho established the 'Rootwin Investment Association' and acquired Esmo, a KOSDAQ-listed company producing automobile parts, through a no-capital merger and acquisition (M&A) method. It is known that he manipulated the stock price to gain profits by purchasing large amounts of stocks through securities accounts of paper companies he owned.

Mr. Cho is also accused of conspiring with Chairman Lee, the actual owner of Esmo. Together with Chairman Lee, Mr. Cho established the Rootwin Investment Association, received investments from Lime, and acquired numerous companies including Esmo Materials. Additionally, they raised stock prices by distributing false press releases and other methods.

In the first trial, the court stated, "Stock price manipulation and dissemination of false information are serious economic crimes that undermine the foundation of the capitalist system. The defendant was sentenced to five years in prison in 2011 for violating the Capital Markets Act and served his sentence, but during this period, he met with individuals related to the case and prepared for the crime while incarcerated, indicating that the prison term did not help in rehabilitation at all. Furthermore, the fact that he subsequently committed a series of crimes against multiple listed companies shows that, regardless of the Lime incident, the nature of the crimes is very serious."