[Law & Story] Prosecution Must Swiftly Conclude Kim Keon-hee's Deutsche Motors and Luxury Bag Investigations

Court Recognizes Son's Complicity in Stock Manipulation
Leadership Shake-up and On-site Investigation Deal Blow to Prosecution's Credibility
Debate Over Prosecution's Existence... Investigation into Kim Must Be Fair and Swift

Seokjin Choi, Legal Affairs Reporter

In the appeal trial of the ‘Deutsche Motors stock manipulation’ case, the first trial’s not guilty verdict for the financier Son was overturned. While the court upheld the first trial’s not guilty judgment on the prosecution’s primary charge that Son conspired to manipulate stock prices, it recognized the prosecution’s additional charge in the second trial of Son’s ‘aiding and abetting’ stock manipulation as guilty.

Although the requirements for establishing co-perpetration?that is, having a shared criminal intent with the main perpetrators of stock manipulation and performing certain specialized roles in a division of labor, known as ‘functional act control’?were deemed insufficient, the court concluded that it was not unreasonable to acknowledge that Son at least tacitly recognized the main perpetrators’ market manipulation activities and assisted them.

Son is a figure who attracted significant attention because the prosecution’s handling of this case was expected to be a gauge for deciding whether to take judicial action against First Lady Kim Keon-hee. The prosecution also announced that it would observe the appellate court’s judgment on Son before making a final decision regarding Kim.

Of course, Son’s guilty verdict in the second trial does not necessarily imply Kim’s guilt, nor does it obligate the prosecution to indict her. There are differences between the two in terms of the timing, form, degree of involvement in the stock transactions considered market manipulation by the prosecution, and whether they had contact with the main perpetrators.

However, it is undeniable that the court’s guilty judgment against Son increases the likelihood that Kim, whose accounts were recognized as manipulated accounts in both the first and second trials and who, unlike Son, was confirmed to have profited from the stock price increase, may be indicted.

‘In dubio pro reo’?a legal maxim meaning ‘when in doubt, favor the defendant.’ Ironically, the prosecution, which has always appeared intimidated before Kim, now finds itself in a situation where if there is suspicion of guilt, it must indict her when deciding whether to prosecute.

In fact, it is unusual for the prosecution to decide whether to indict a particular suspect in a stock manipulation case by waiting for the trial results of another suspect. It is worth revisiting that the investigation into Kim began just a week before the April 2020 general election following complaints by former Moon Jae-in government officials Choi Kang-wook and Hwang Hee-seok, and that despite a 19-month investigation under the leadership of Seoul Central District Prosecutors’ Office chiefs Lee Sung-yoon and Lee Jung-soo, appointed by former President Moon, Kim was not indicted.

However, the current situation was caused by the prosecution’s failure to conduct timely investigations and conclude the case, Kim’s lack of active cooperation with the investigation, and President Yoon Suk-yeol. The personnel reshuffle immediately following the Prosecutor General’s order to ‘form a dedicated team and conduct a swift investigation,’ the humiliating circumstances where prosecutors investigating the suspect had their mobile phones confiscated, and the on-site investigation of Kim all undermined public trust in the prosecution’s investigation.

The responsibility ultimately lies with the prosecution for the situation where even a non-prosecution decision on the ‘luxury bag acceptance’ case?which has no penalty provisions under the Anti-Graft Act and where all 14 citizens participating in the Prosecutorial Investigation Review Committee recommended non-prosecution?must be handled cautiously.

The Innovation Party recently proposed legislation to abolish the prosecution office entirely and establish a Serious Crime Investigation Agency and a Public Prosecution Agency. The prosecution’s survival is being debated after it lost its authority to direct police investigations and direct investigation rights over many crimes. It is time for a fair and swift investigation and disposition regarding Kim, which can no longer be delayed.