Kim Geon-hee 'Non-Prosecution' Decision, Son Charged with 'Aiding and Abetting'
No Contact with Main Player, Non-Expert in Stock Investment
Prosecutors: "Mrs. Kim Did Not Have Implicit Awareness of Market Manipulation"
The prosecution, which had been investigating allegations of Kim Geon-hee’s involvement in stock price manipulation at Deutsche Motors, concluded after four years and six months that there was “no suspicion.” Son, who played the role of a “jeonju (money provider)” like Kim, was found guilty of aiding and abetting in the appellate court, but Kim was deemed not subject to aiding and abetting charges. In Kim’s case, unlike Son, she did not communicate with the main manipulators (those who executed the stock price manipulation), nor was she a stock investment expert, so it was judged that she could not be considered under the same charges as Son, as she was unaware of the price manipulation and collusive trading.
The Anti-Corruption Investigation Division 2 of the Seoul Central District Prosecutors’ Office (Chief Prosecutor Choi Jae-hoon) announced on the 17th that Kim Geon-hee was cleared of charges of violating the Capital Markets Act. Kim was suspected of participating as a money provider in the process where former Deutsche Motors Chairman Kwon Oh-soo organized stock price manipulation from 2009 to 2012 by mobilizing manipulators.
The prosecution identified six accounts (Shinhan, DB, Daishin, Mirae Asset, DS, Hanwha) linked to Kim that had price manipulation orders. The first and second trial courts in the case of former Chairman Kwon recognized that three of these accounts (Daishin, Mirae Asset, DS) were used in the proven price manipulation activities. According to the prosecution, actual price manipulation orders were placed on these six accounts over a total of 19 days. During the first stage, which the court judged the statute of limitations had expired, there were 8 days (54 collusive trades, 177 real trades), and during the second stage, which was within the statute of limitations, there were 11 days (50 collusive trades, 1 real trade). However, the prosecution found insufficient evidence to support the suspicion that Kim was aware her accounts were being used for stock price manipulation during this period or that she had prior contact with the manipulators to trade stocks for price manipulation purposes.
Son Communicated with Main Manipulators and Was a Stock Expert...Kim Was a General Investor, No Evidence of Awareness of Price Manipulation
Josangwon, the 4th Deputy Chief Prosecutor of the Seoul Central District Prosecutors' Office, is announcing the investigation results of the case involving the president's spouse's alleged involvement in manipulating the stock price of Deutsche Motors at the briefing room of the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul, on the 17th. In the announcement, the prosecution cleared Mrs. Kim Geon-hee, who was suspected of stock price manipulation of Deutsche Motors. Photo by Kang Jinhyung aymsdream@
Specifically, Son placed price manipulation orders directly through the HTS (Home Trading System) at the request of the main manipulator Kim, who also testified that he informed Son about managing the stock price. Kim sent text messages to Son in July 2012 such as “Please push a little at the closing price,” “Brother, please hold Deutsche a bit,” and “Brother, can you hold about 10,000 shares?”
On the other hand, the prosecution’s view is that it is difficult to consider Kim as an accomplice because there were no such circumstances or indications. Apart from former Chairman Kwon and the primary manipulator Lee, there was no evidence of communication with other main perpetrators. The court judged that two instances of collusive trading occurred on October 28 and November 1, 2010, in Daishin Securities accounts under the communication of Kwon and his group, but the prosecution stated that although it is presumed that Kwon, who received volume requests from the second-stage main manipulator Kim, contacted Kim to sell stocks as she directly operated the accounts, no concrete evidence of such communication at the time of the trades was found.
During the period Kim was allegedly involved in the crime (January 2010 to March 2011), there was no evidence or indication that she communicated directly with main perpetrators other than former Chairman Kwon and the primary manipulator Lee. Multiple related witnesses testified that “Kim did not know much about stocks and lacked knowledge and experience,” which also formed the basis for the no-suspicion judgment.
Additionally, in the case of Choi Eun-soon, price manipulation orders were identified in two accounts. The Shinhan account was operated directly by Choi herself, as she testified, while the Mirae Asset account was considered a nominee account of former Chairman Kwon and was cleared of charges. After further investigation of about 60 out of 94 account holders, including Kim and her mother, whose accounts were used for price manipulation, the prosecution decided on no suspicion or non-prosecution.
Prosecution: “For Kim to Be Guilty of Aiding Like Son, She Must Have Had at Least a Tacit Awareness of Price Manipulation”
The prosecution also mentioned that to apply aiding and abetting charges to Kim, there must be suspicion that she had at least a tacit awareness of the price manipulation, but no clues to prove this were found. The prosecution explained, “She bought stocks on the recommendation of former Chairman Kwon, and while there can be various expectations at the upper end of that, expecting that he manipulated the stock price to raise it is beyond those expectations. To consider even tacit awareness, there must be a ‘subject,’ but that level of information is insufficient to meet the elements of tacit awareness.”
Ultimately, the prosecution understood the substance of this case as “former Chairman Kwon Oh-soo, together with the main manipulators, carried out the price manipulation crime by utilizing the accounts and funds of ‘early investors’ who had invested before Deutsche Motors was listed.” It is difficult to see Kim as having recognized and been involved in the crime, as she simply trusted and invested in Kwon.
Meanwhile, following the luxury bag bribery case, the prosecution’s decision not to indict Kim again is expected to intensify criticism of the prosecution for being “bulletproof” and calls for a special investigation into Kim, especially among opposition parties such as the Democratic Party. This case, which began investigation in April 2020 during the Moon Jae-in administration, has been fraught with controversy for the entire four years and six months until the final disposition was made. After former Democratic Party lawmaker Choi Kang-wook’s complaint, the case was reassigned from the Criminal Division 1 to Criminal Division 6 due to lack of progress. In October 2020, then Minister of Justice Choo Mi-ae stripped then Prosecutor General Yoon Seok-youl, now President, of his investigative authority. The prosecution reassigned the case to the Anti-Corruption Investigation Division 2 in November 2020. Current Prosecutor General Shim Woo-jung also does not have investigative authority.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
