Charges Including Violation of the Capital Markets Act
The CEO of Cellivery, a bio company and the first company to be listed under the growth special listing system, has been brought to trial on charges including violation of the Capital Markets Act.
The Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Suhong) announced on the 17th that they have arrested and indicted Cho Daewoong, CEO of Cellivery, on charges of fraudulent unfair trading under the Capital Markets Act.
According to the prosecution, CEO Cho and others raised about 70 billion KRW around September 2021 through issuing convertible bonds, publicly disclosing that the funds would be used for new drug research and development costs such as COVID-19 treatments. However, they are accused of acquiring a wet tissue manufacturer and lending over 20 billion KRW to this company without collateral (charges of fraudulent unfair trading and false statements of material facts under the Capital Markets Act).
Additionally, in March 2023, knowing in advance that Cellivery would be designated as a management item and its trading would be suspended, they are accused of avoiding losses exceeding 500 million KRW by selling their own shares using insider information (use of undisclosed information under the Capital Markets Act).
Cellivery entered the KOSDAQ in November 2018 through the growth special listing system, which exempts excellent companies with growth potential from capital and other management performance requirements necessary for listing. It was the first company to apply this system after its introduction.
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