Supreme Court Confirms Not Guilty Verdict for Ra Jeong-chan, CEO of Nature Cell, in Stock Manipulation Allegations

Ra Jeong-chan, CEO of Nature Cell, who was prosecuted for manipulating stock prices by distributing false and exaggerated information about stem cell treatments for degenerative arthritis, was acquitted.

Chairman Ra Jeong-chan of Nature Cell. [Photo by Yonhap News]

The Supreme Court's 2nd Division (Presiding Justice Min Yoo-sook) upheld the acquittal verdict on the 9th in the final appeal trial against Ra and others, who were charged with violating the Capital Markets and Financial Investment Business Act. The acquittal was also confirmed for CFO Ban Mo, Legal Team General Director Byun Mo, and Public Relations Director Kim Mo, who were tried alongside CEO Ra.

Ra and others were prosecuted for applying for conditional product approval of the degenerative arthritis stem cell treatment "Jointstem" to the Ministry of Food and Drug Safety, distributing press releases with identical content through a self-established media outlet, and falsely disclosing the use of large stock sale proceeds as stem cell development expenses, which led to a sharp rise in stock prices.

The first trial court ruled, "Although the prosecution argued that Nature Cell applied for conditional approval to boost stock prices despite knowing it would be rejected, the submitted evidence is insufficient to recognize this. Also, if there is reasonable evidence, a company promoting its performance through media reports does not constitute rumor spreading," and acquitted the defendants.

The second trial court maintained the first trial's acquittal, stating, "There is no proof of prior collusion between investors and Nature Cell during the rights offering, nor does it appear that Nature Cell received compensation from investors."

The Supreme Court also ruled that "there was no error in the lower courts' judgments regarding the failure to conduct necessary hearings, violation of the rules of logic and experience, exceeding the limits of free evaluation of evidence, establishment of the crime of violating the Capital Markets Act due to fraudulent unfair trading, conspiracy, or the exclusionary rule for illegally obtained evidence," affirming the correctness of the lower courts' decisions.