'Stock Manipulation Allegations' Rajungchan, CEO of Nature Cell, Acquitted in First Trial (Summary)

Court: "No evidence of 'item approval application for stock price boosting'"
Rajungchan: "Will focus on stem cell research from now on"

[Image source=Yonhap News]

[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.

The Criminal Division 13 of the Seoul Southern District Court (Chief Judge Shin Hyuk-jae) delivered the verdict at 10 a.m. on the 7th in the first trial 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.

The court stated, "The prosecution argued that Nature Cell applied for conditional approval to boost stock prices despite knowing it would be rejected, but the submitted evidence is insufficient to acknowledge this," and added, "If there is reasonable evidence, a company promoting its performance through media reports does not constitute rumor spreading."

Earlier, at 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.

This was based on 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 the same content through a self-established media outlet, and falsely disclosed the use of large stock sale funds as stem cell development expenses, leading to a sharp rise in stock prices.

They were also accused of gaining unfair profits through wrongful acts during Nature Cell's decision to conduct a third-party allotment capital increase of 15 billion KRW in April 2015.

In his closing 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 incurable diseases and attract overseas patients."

However, the prosecution suspected that they assigned stocks subject to a one-year lock-up period to participants in the capital increase, then lent an equal number of old shares (granting disposal rights) to avoid losses and generate selling profits, thereby obtaining unfair gains worth approximately 6.2 billion KRW.

Immediately after the trial, CEO Ra told reporters, "From now on, I will diligently and humbly research stem cells without being suspected unintentionally, and do my best to save many lives," adding, "I have nothing more to say."

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