'Stock Manipulation Allegations' Rajungchan, CEO of Naturecell, Acquitted in First Trial

[Asia Economy Reporter Yoo Byung-don] Ra Jeong-chan (57), CEO of Nature Cell, who was prosecuted for manipulating stock prices by distributing false and exaggerated information about stem cell treatments, was acquitted in the first trial.

The Criminal Division 13 of the Seoul Southern District Court (Chief Judge Shin Hyuk-jae) delivered this verdict on the morning of the 7th at 10 a.m. in the first trial sentencing of CEO Ra, who was charged with violating the Capital Markets and Financial Investment Business Act. Chief Financial Officer (CFO) Ban Mo (48), Legal Team General Director Byeon Mo (46), and Public Relations Director Kim Mo (54), who were also indicted on the same charges, were all acquitted as well.

Previously, in the sentencing hearing held in December last year, the prosecution requested the court to sentence CEO Ra to 12 years in prison, impose a fine of 30 billion KRW, and confiscate 23,550,165,646 KRW.

The charges stem from allegations that CEO Ra and others applied for conditional product approval from the Ministry of Food and Drug Safety for the degenerative arthritis stem cell treatment 'Jointstem,' distributed press releases with identical content through a self-established media outlet, and falsely disclosed the use of large stock sale funds as stem cell development expenses, which led to a sharp rise in stock prices.

Additionally, they were accused of unfair acts to gain unjust profits during Nature Cell's decision to conduct a 15 billion KRW third-party allotment paid-in capital increase in April 2015.

The prosecution suspected that they publicly announced that shares allocated to participants in the paid-in capital increase would be subject to a one-year lock-up period prohibiting disposal, but then lent the same amount of existing shares (granting disposal rights) to avoid losses and generate selling profits, thereby obtaining approximately 6.2 billion KRW in unjust profits.

During his final argument, CEO Ra stated, "I did not seek personal gain nor did I obtain any," and added, "We will challenge ourselves to obtain formal approval as soon as possible to help patients with intractable diseases and attract overseas patients."

This content was produced with the assistance of AI translation services.