Artificially Inflated Stock Prices Through Nonexistent Reconstruction Project, 30.5 Billion Won Loss to Company
Seven, Including Listed Company Chairman, Indicted for Providing Hideouts and Burner Phones to Fugitive Chairman
"Serious Crime Undermining the Capital Market" ? Special Prosecutor Indicts Without Detention Despite Dismissed Warrants
From Gapyeong to Uljin: Nationwide Manhunt as Accomplices Who Aided Escape Face Trial
The special prosecutor team led by Min Jungki indicted Yang Namhee and Lee Kihun, chairmen of Wellbiotech, without detention on December 27 on charges of manipulating stock prices under the pretext of participating in Ukraine reconstruction projects. The special prosecutor applied charges of fraudulent unfair trading under the Capital Markets Act and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.
From May to October 2023, they are accused of artificially boosting the stock price by distributing false and exaggerated press releases that made it appear as if Wellbiotech was participating in Ukraine reconstruction projects despite lacking real capabilities. They then allegedly sold their shares, making an illicit profit of 21.5 billion won. Additionally, they are accused of causing 30.5 billion won in damages to the company by selling 16 billion won worth of convertible bonds (CBs) held by the company at a bargain price to themselves and their associates.
Notably, this indictment also includes several accomplices who helped Lee Kihun, a key figure in the stock manipulation scheme, evade capture for 55 days. Lee fled in July before a warrant review hearing and was apprehended in September. The special prosecutor brought to trial seven individuals, including Mr. Lee, the chairman of a listed company, who provided Lee with hideouts, phones registered under borrowed names, vehicles, and helped him escape to various locations across the country, such as Gapyeong, Mokpo, and Uljin, on charges of harboring and aiding a fugitive.
The special prosecutor team characterized this case as a "carbon copy crime" similar to the stock manipulation involving Sambu Construction. The team stated, "As this is a serious crime that undermines the order of the capital market in the Republic of Korea, we will do our utmost to maintain the prosecution so that the defendants receive sentences commensurate with their crimes." Although arrest warrants for Chairman Yang had previously been dismissed twice, the special prosecutor decided to indict him without detention before the end of the investigation and leave the judgment to the court.
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