'SG Incident' All 10 Corporations of Ra Deok-yeon Ordered Dissolution... 4 Months After Prosecution's Request

The 10 corporations used by the key figure Ra Deok-yeon Hoan (42) and his associates in the 'SG Securities Stock Price Crash Incident' for stock price manipulation and money laundering purposes have all been dissolved within about four months.

[Image source=Yonhap News]

On the 10th, the Seoul Southern District Prosecutors' Office announced that it had obtained dissolution orders for all 10 corporations of Ra's group, including Hoan FG, thereby stripping them of corporate status. The prosecution stated in July, "To impose legal responsibility not only on the natural persons who committed the crimes but also on the corporations that harmed public interest, and to prevent corporations from being reused for criminal activities," they filed for dissolution orders against these corporations.

The hearings for the dissolution order requests are conducted at the courts with jurisdiction over each corporation's location. By September, five corporations had been ordered dissolved. After two months of individual hearings at each court, the procedure was completed when the Seoul Southern District Court issued the dissolution order for the last corporation, Corporation A, the day before. It is reported that some of the corporations subject to dissolution requests submitted opinions claiming the prosecution's requests were unjust.

The dissolution order for corporations is stipulated in Article 176 of the Commercial Act. If there is cause, the court may order the dissolution of a company upon request by interested parties or prosecutors, or ex officio. The conditions are: ▲ when the company's establishment purpose is illegal ▲ when the company does not commence business within one year of establishment without justifiable reason or suspends business for more than one year ▲ when directors or employees executing company affairs violate laws or articles of incorporation in a way that makes the company's continuation impossible.

On July 13, the prosecution reviewed Ra's corporations and filed dissolution orders based on the following: ▲ corporations established and operated to conceal crimes such as collusive trading and to launder criminal proceeds (illegal establishment purpose) ▲ corporations that created false sales to disguise acquisition of criminal proceeds and conducted no other business (business suspension for over one year) ▲ cases where the corporation's CEO or executives were accomplices (violation of laws or articles of incorporation by corporate executives).

Ra and his associates have been identified as the main culprits behind the 'SG Securities Stock Price Crash Incident' in April and are currently on trial at the Seoul Southern District Court. Ra and others are accused of manipulating the stock prices of eight listed companies, including Samchully and Dow Data, from May 2019 to last April, using thousands of billions of won raised from investors through profit agreements, resulting in approximately 730.5 billion won in illicit gains.