On April 23, the 14th Criminal Division of the Seoul Southern District Court (Presiding Judge Lee Jeonghee) held the second hearing for Cho, who is facing charges of violating the Capital Markets Act and aggravated breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, along with co-defendant Kwon.
Cho's attorney stated, "We deny the charges," and added, "We are looking into appointing another attorney, so we request additional time." In response, the court said, "At the first hearing in March, we notified that this hearing would be held four weeks later, considering the defendant's detention. Four weeks is not a short period of time."
The attorney for Kwon, who was indicted without detention as an inside director along with Cho, also denied the charges, stating, "He acted under Cho's instructions, so there was no collusion. The allegations of fraudulent unfair trading are not factual, so this does not constitute a violation of the Capital Markets Act."
According to the prosecution, in September 2021, they raised approximately 70 billion KRW by issuing convertible bonds, claiming the funds would be used for research and development of new drugs such as COVID-19 treatments. However, they are accused of actually using the funds to acquire a wet tissue manufacturing company.
They are also accused of lending more than 20 billion KRW to the acquired wet tissue company without any collateral, and in March 2023, after learning that a disclaimer of opinion would be issued in the audit of the 2022 financial statements, using undisclosed internal information to sell shares before trading was suspended, thereby avoiding losses of more than 500 million KRW.
During the hearing, Cellivery shareholders in the gallery hurled criticism at the defendants. Shareholders shouted remarks such as, "How much did you steal?", "You fraudster," and "Even ghosts wouldn't take people like you."
Cellivery drew attention in November 2018 as the first company to be listed on KOSDAQ under the "growth potential special listing" system. This system lowers the listing threshold for companies with high growth potential, even if their financial performance is lacking. However, in March 2023, the company received a disclaimer of opinion in its financial statement audit, leading to a delisting decision last year, and liquidation trading was conducted earlier this month.
The next hearing is scheduled for 2:00 p.m. on the 29th of next month, during which witness examination will take place.
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