Hundreds of Billions in Unfair Gains from Lime Fund Ponzi Scheme... Media Company Officials Indicted

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] Media company officials accused of engaging in fraudulent transactions by attracting funds from Lime Asset Management funds to resolve management insolvency have been brought to trial.

The Seoul Southern District Prosecutors' Office Financial Investigation Division 1 (Chief Prosecutor Moon Hyun-chul) announced on the 31st that they have arrested and indicted Mr. A (52), chairman of a KOSDAQ-listed company, and Mr. B (53), chairman of another KOSDAQ-listed company, on charges of violating the Capital Markets Act (fraudulent unfair trading). Two accomplices were also indicted without detention.

According to the prosecution, those involved in the management of Company H are suspected of illegally raising 26.4 billion KRW from Lime to cover up the company's insolvency issues.

Prosecutors' investigation revealed that other companies chaired by Mr. A and Mr. B were mobilized to participate in investment transactions as if they were involved in the funding process.

The prosecution viewed that although Lime's funds were improperly funneled through these companies and ultimately into Company H, they fabricated the transactions to appear as legitimate investments, thereby disrupting the capital market.

Mr. A and Mr. B were also investigated for issuing false reports and disclosures claiming they were promoting new businesses to raise Company H's stock price.

Additionally, they are charged with issuing 8 billion KRW worth of bonds with warrants (BW) without paying the subscription price, registering them, and using these to conduct convertible bond (CB) transactions to gain unfair profits worth approximately 8 billion KRW.

The prosecution also considered former Company H chairman Mr. C as an accomplice, but since Mr. C's whereabouts are currently unknown, prosecution has been suspended.

The prosecution stated, "These offenders used KOSDAQ-listed companies as tools for personal gain, causing insolvency of the company and Lime funds and undermining the order of the capital market," and added, "We will continue to respond strictly to financial and securities crime offenders in the future."

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