Kim Gunhee Special Prosecutor Indicts and Detains Former Sambu Construction Vice Chairman Kihoon Lee on Stock Manipulation Charges

Stock Price Manipulation at Sambu Construction with False Information
Suspected of Illegally Gaining 36.9 Billion Won

Former Vice Chairman of Sambu Construction and concurrently Chairman of Wellbiotech, Kihoon Lee, who fled while under investigation for the "Sambu Construction Stock Manipulation" case, was arrested and entered the Kim Gunhee Special Prosecutor's Office set up in Jongno-gu, Seoul, on the 11th. Photo by Yonhap News

Kihoon Lee, former Vice Chairman of Sambu Construction and concurrently Chairman of Wellbiotech, who is accused of stock manipulation, has been indicted and will stand trial. Lee is considered a key figure in the Sambu Construction stock manipulation case.

The Kim Gunhee Special Prosecutor's team (headed by Special Prosecutor Min Jungki), which is investigating all allegations surrounding First Lady Kim Gunhee, announced on the 26th that Lee was indicted and detained on charges of violating the Capital Markets Act and the Financial Investment Services and Capital Markets Act.

According to the special prosecutor's team, Lee is suspected of colluding with Iljun Lee, Chairman of Sambu Construction, Eunggeun Lee, former CEO, and Seongok Cho, former Chairman, among others, to illegally gain 36.9 billion won between May and June 2023.

Previously, the special prosecutor's team identified Lee as a key figure in the Sambu Construction stock manipulation case and requested an arrest warrant in July. However, Lee did not appear for the warrant review and fled. After going into hiding in Gapyeong, Gyeonggi Province; Mokpo, South Jeolla Province; and Uljin, North Gyeongsang Province, Lee was arrested by the special prosecutor's team on the 10th at a villa in Mokpo.

The special prosecutor's team believes that Sambu Construction deceived investors by distributing press releases in May 2023, claiming to have signed various business agreements with local governments in Poland during the Ukraine Reconstruction Forum, thus creating the appearance that it would participate in reconstruction projects. Classified as a Ukraine reconstruction-related stock, Sambu Construction's share price surged from around 1,000 won in May 2023 to as high as 5,500 won within two months.

The special prosecutor's team also plans to continue investigating allegations of stock manipulation involving Wellbiotech, which was led by Lee. Wellbiotech is suspected of manipulating its stock price by misleading investors into believing it would participate in the Ukraine reconstruction project alongside Sambu Construction in May 2023. The special prosecutor's team has viewed Lee as the link connecting Sambu Construction and Wellbiotech throughout its investigation.