Prosecutors Request Warrant; Lee Woong-yeol's Side Says "Situation Arising from Misunderstanding" (Comprehensive Report 2)

Lee Woong-yeol, former chairman of Kolon Group

[Asia Economy Reporter Seongpil Cho] The prosecution has requested an arrest warrant for Lee Woong-yeol, former chairman of the Kolon Group (63), who is considered the ultimate person responsible for the controversy surrounding the osteoarthritis gene therapy drug Invossa-K Injection (Invossa).

It has been about a year since the full-scale investigation began in June last year.

The Criminal Division 2 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Chang-soo) announced on the afternoon of the 25th that it had requested an arrest warrant for former Chairman Lee on charges including violations of the Capital Markets and Financial Investment Services Act (fraudulent trading, market manipulation, etc.) and breach of trust and mediation.

The pre-arrest suspect interrogation (warrant hearing) for former Chairman Lee is expected to be held at the Seoul Central District Court as early as the afternoon of the 26th or at the latest on the morning of the 29th. The judge who will review the necessity of his detention has not yet been appointed.

Former Chairman Lee is accused of manufacturing and selling Invossa with a 'kidney-derived cell (GP2-293)' component different from the approved 'chondrocyte' component of the second vial, despite having received product approval from the Ministry of Food and Drug Safety (MFDS) for the second vial component of Invossa as 'chondrocytes' from November 2017 to March last year.

Invossa is an osteoarthritis gene therapy injection composed of vial 1 containing human chondrocytes and vial 2 containing genetically modified cells introduced with the chondrocyte growth factor (TGF-β1).

This injection was approved by the MFDS in 2017 as the first gene therapy in Korea, but the approval was finally revoked in July last year after it was revealed that the genetically modified cells in vial 2 were kidney cells that could cause tumors, not the chondrocytes stated in the submitted data at the time of approval.

Former Chairman Lee is also accused of knowing in July 2017 that Invossa contained kidney-derived cells instead of chondrocytes but hiding this fact and submitting false documents to obtain MFDS approval.

The prosecution believes that former Chairman Lee was also involved in Kolon TissueGene's 'stock listing fraud.' Kolon TissueGene, a subsidiary of Kolon Life Science that led the development of Invossa, was listed on the KOSDAQ market in 2017, leveraging the MFDS approval of Invossa.

The prosecution suspects that former Chairman Lee was involved in and received reports regarding Kolon TissueGene's use of false documents submitted during Invossa's MFDS approval process for the stock listing.

The prosecution summoned former Chairman Lee as a suspect for questioning on the 18th. This was the first time he appeared before the prosecution regarding the Invossa controversy since the investigation began in June last year.

In February, the prosecution indicted Kolon Life Science CEO Lee Woo-seok on seven charges including violations of the Pharmaceutical Affairs Act, the Capital Markets Act, and the Subsidy Management Act, and detained him. Kolon Life Science and Kolon TissueGene were also indicted without detention under the principle of corporate liability.

In December last year, the prosecution successively indicted three individuals including Director Cho, who oversaw clinical development, former CFO Kwon of Kolon TissueGene involved in the stock listing fraud case, and Head Yang of Kolon Life Science, all of whom were detained.

Upon news of the arrest warrant request for former Chairman Lee, his legal team expressed regret in a statement.

The legal team said, "We believe that the recent series of situations stem from misunderstandings, and these misunderstandings will surely be resolved," adding, "We will await the court's wise judgment."

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