How Will the 264.2 Billion KRW Asset Seizure of Ra Deok-yeon Affect Compensation? [Ra Deok-yeon Gate]

Reduced Possibility of Defendant's Asset Disposal During Provisional Seizure
Indirect Impact on Civil Cases... "Asset Securing Is Important"

The court has decided to impose a seizure preservation measure on CEO Ra Deok-yeon Hoan's assets amounting to 264.2 billion won. However, since a lengthy criminal dispute is expected, it is anticipated that it will take a long time for the victims to recover their investment losses through compensation claims.

According to the legal community on the 18th, the Seoul Southern District Court accepted the prosecution's request for seizure preservation of CEO Ra's group’s assets worth 264.2 billion won on the 16th. The targeted assets included CEO Ra’s real estate, deposits, stocks, cryptocurrencies, corporate-owned real estate, and claims for the return of office lease deposit guarantees.

The seizure preservation before indictment, accepted by the court, is a measure where the prosecution freezes assets equivalent to the proceeds of crime from suspects before indictment. As CEO Ra’s group is subject to seizure preservation, they cannot freely dispose of assets equivalent to this amount until a final court ruling is made.

The larger the amount of seizure preservation, the fewer assets the suspect can dispose of during the trial period. Therefore, the scale of seizure preservation also affects civil lawsuits. However, it is expected to take a long time for bona fide investors to receive compensation through civil litigation. This is because the civil lawsuit related to this case can only proceed after the criminal trial concludes, the suspects are identified, and the amount of damages is determined. Sang-jun Han, lead attorney at Daegun Law Firm, explained, "Most criminal cases of this type go all the way to the Supreme Court, so the damage recovery process can only begin after the final appeal is confirmed."

It is also crucial how much of the stock manipulation gang’s assets the prosecution and investigative agencies can actually secure. Investors file civil lawsuits considering the secured assets and receive dividends (proportional distribution) according to the ratio of their claims. For example, if 200 billion won is secured for the suspect and there are 200 creditors, each would receive 1 billion won. Creditors with priority, such as those with pledge rights, receive dividends first.

[Image source=Yonhap News]

Yang Tae-jung, lead attorney at Gwangya Law Firm, said, "If the secured assets are less than the total amount to be distributed, investors will be compensated with amounts far less than their individual losses," adding, "It is important to find assets hidden under borrowed names in addition to the currently revealed assets."

Meanwhile, securities firms involved in this case have also taken provisional seizure actions against CEO Ra. Accordingly, the amounts owed to securities firms may be combined with the losses of general investors and distributed together. Hana Securities has provisionally seized 3.29 billion won in unpaid funds from CEO Ra, and Samsung Securities has seized 180 million won in unpaid funds from his bank accounts. Pil-seo Park, attorney at Hannuri Law Firm, stated, "The claims of securities firms will also be combined with those of general creditors and distributed according to the ratio of claims."

However, in this case, it is expected to be challenging to distinguish between victims and accomplices, and to specify the amount of damages, making the proof of these aspects crucial.

※This SG Securities-triggered stock price crash has sounded an alarm for the capital market order. Readers’ reports will be a great help in uncovering the truth. We welcome any reports regarding investment damage cases, suspicions of stock manipulation and asset concealment by Ra Deok-yeon’s side, insider details about the mass sales by major shareholders of Dow Data and Seoul Gas, or any other related information (jebo1@asiae.co.kr). Asia Economy will do its best to establish a transparent capital market order.

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