Appeal Over Luxury Handbag Allegation Dismissed
On April 25, the Seoul High Prosecutors' Office decided to reopen the investigation into the stock price manipulation allegations involving First Lady Kim Keonhee and Deutsche Motors. A reopened investigation means that the Seoul High Prosecutors' Office has accepted an appeal regarding a case that the Seoul Central District Prosecutors' Office had previously dismissed, and has ordered a new investigation. It is considered unusual in legal circles for the High Prosecutors' Office to order a reopened investigation into a case handled by the District Prosecutors' Office. The investigation is expected to be handled by the Criminal Division of the Seoul High Prosecutors' Office.
The Seoul High Prosecutors' Office dismissed the appeal regarding Kim Keonhee's receipt of a luxury handbag, affirming the Seoul Central District Prosecutors' Office's decision of non-indictment.
Choi Kangwook, former lawmaker of the Democratic Party, filed an appeal with the Seoul High Prosecutors' Office in October 2024, arguing that the Seoul Central District Prosecutors' Office's decision to clear Kim Keonhee of stock price manipulation allegations was unjust and requesting a review. As a result, in November of the same year, the Seoul Central District Prosecutors' Office transferred the investigation records and the investigation team's opinion documents related to Kim Keonhee to the Seoul High Prosecutors' Office. Five years earlier, Choi had filed a complaint against Kim Keonhee for alleged violations of the Capital Markets Act.
The Anti-Corruption Investigation Division 2 of the Seoul Central District Prosecutors' Office had initially cleared Kim Keonhee and her mother, Choi Eunsun, of all charges. The reason was that they determined Kim Keonhee and others had only entrusted their accounts to others without knowing about the stock price manipulation activities of Kwon Osu, the former chairman of Deutsche Motors, who was identified as a key figure in the alleged scheme.
The Seoul Central District Prosecutors' Office investigation team also concluded that there was no evidence to prove Kim Keonhee's involvement in stock price manipulation. The investigation team concluded that "while it is possible that Kim Keonhee sold shares at the request of those engaged in price manipulation, it is also possible that she sold them after being advised to do so due to favorable company news or other reasons."
The Seoul Central District Prosecutors' Office also maintained that the reasons for appeal submitted by former lawmaker Choi were not accepted. In his 133-page appeal, Choi pointed out that the prosecution had not conducted a single compulsory investigation against Kim Keonhee and that some suspicions raised by the media had not been sufficiently clarified.
While re-examining the case records, the Seoul High Prosecutors' Office has been reviewing whether there were shortcomings in the investigation process at the Seoul Central District Prosecutors' Office and whether there are additional matters that require investigation. The stock price manipulation case involving Kim Keonhee dates back to 2020, when then-Minister of Justice Choo Mi-ae stripped then-Prosecutor General Yoon Sukyeol of his authority to direct the investigation, preventing subsequent prosecutor generals from intervening. However, with the appeal to the High Prosecutors' Office, Prosecutor General Sim Woojeong is now able to review the case.
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