Chairman Kang Young-kwon of Edison Motors Arrested and Indicted on Stock Manipulation Allegations
[Asia Economy Reporter Yoo Byung-don] Kang Young-kwon, chairman of Edison Motors, who faced allegations of stock price manipulation following the failed acquisition of Ssangyong Motor, has been indicted while in custody.
According to the prosecution on the 25th, the Joint Investigation Team for Financial and Securities Crimes at the Seoul Southern District Prosecutors' Office (led by Dan Sung-han) indicted Chairman Kang and three Edison Motors executives yesterday on charges of violating the Capital Markets Act. Chairman Kang and one other executive were indicted while in custody, while the remaining two were indicted without detention.
Chairman Kang and others are accused of engaging in unfair trading by boosting stock prices using the positive news of pursuing the acquisition of Ssangyong Motor.
Edison EV (now Smart Solutions), a listed company that served as Edison Motors' funding channel, saw its stock price surge on news of the Ssangyong Motor acquisition attempt, but the merger was canceled after failing to secure acquisition funds.
During this process, the major shareholder investment association sold most of its shares and realized profits, causing losses to ordinary shareholders and raising controversy over stock price manipulation. Edison EV, whose trading was suspended, filed for bankruptcy in court last May.
After detecting Edison Motors' violations of the Capital Markets Act and unfair trading allegations, the Financial Supervisory Service transferred the case to the Seoul Southern District Prosecutors' Office via a 'fast track' process, bypassing the Securities and Futures Commission review.
The prosecution accelerated the investigation by conducting raids on Edison Motors and related companies in August.
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The prosecution believes that Chairman Kang and others deliberately inflated stock prices with false information related to mergers and acquisitions (M&A) and sold shares in advance.
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