Prosecutors: "No Evidence Found of ShillaJen's Lobbying in Political and Government Circles"

Announcement of Investigation Results on Sillajen Unfair Trading Case
Moon Eunsang, Lee Yonghan, Kwak Byeonghak and 2 Others Arrested and Indicted

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] The police investigating the Shinilajen unfair trading case and allegations of lobbying involving political and government circles have stated that "the substance has not been confirmed."

The Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Seo Jeong-sik) held a briefing on the 8th and announced, "As a result of the investigation, four people were arrested and prosecuted on charges including violation of the Capital Markets Act, and five people were prosecuted without detention," adding, "The allegations of lobbying involving political and government circles related to Shinilajen raised in various media have not been substantiated."

Previously, some quarters raised lobbying suspicions, claiming that certain influential figures in the ruling party were involved in this case by participating in Shinilajen events.

The prosecution assigned the investigation of the Shinilajen unfair trading case to the Financial Investigation Division of the Seoul Southern District Prosecutors' Office in February and has been conducting the investigation since then.

According to the prosecution's investigation results, Moon Eun-sang, CEO of Shinilajen, former CEO Lee Yong-han, and former auditor Kwak Byung-hak were arrested and prosecuted on charges of acquiring 35 billion KRW worth of bonds with warrants (BW) through a "fund recycling" method without their own funds by using paper companies, thereby obtaining 191.8 billion KRW in illicit gains.

Additionally, the prosecution included in the indictment charges that CEO Moon caused damage to Shinilajen by inserting Company A in the process of purchasing patent rights in 2013 and inflating the purchase price from 70 million KRW to 3 billion KRW, as well as charges related to excessively granting stock options to acquaintances in 2015 and then receiving 3.8 billion KRW in cash from the sale of new shares.

The prosecution has seized and preserved assets worth approximately 135.4 billion KRW, including their high-priced homes and stocks, to recover the illicit gains obtained by CEO Moon and others through these methods, and plans to thoroughly recover the illicit gains through additional measures in the future.

However, regarding allegations that former and current management of Shinilajen sold stocks to avoid losses after knowing in advance the negative evaluation results of the Phase 3 clinical trial for liver cancer of the immuno-oncology drug 'Pexa-Vec' developed by the company, the prosecution judged that "it is difficult to acknowledge the charges considering the timing of stock sales and the generation of undisclosed information."

The prosecution stated that only Shin Mo, former executive director of Shinilajen's Strategic Planning Center, "sold stocks using adverse undisclosed information and avoided losses of 6.4 billion KRW." Shin is currently under arrest and prosecution.

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