Prosecutors Indict 20 Including Edison Motors for Stock Price Manipulation After One Year Investigation

Prosecutors have indicted 20 individuals involved in stock price manipulation cases, including the 'Edison Motors Ssangyong Motor Acquisition False Disclosure Case,' following approximately one year of investigation.

The Joint Financial and Securities Crime Investigation Division of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Dan Seong-han) announced on the 6th that they have indicted a total of 20 people from July 26 last year to the present, including 10 additional indictments for involvement in stock price manipulation of Edison EV and Company A. Among them, 12 were indicted in custody, and seizure and preservation measures were taken on assets worth approximately 45.3 billion KRW.

'Edison EV Incident' Crime Mechanism Data. Company A = Edison EV, Company C = Edison Motors / Data = Seoul Southern District Prosecutors' Office

The prosecutors stated that 13 people were indicted in connection with the 'Edison EV Stock Price Manipulation Case.' According to the prosecutors, Kang Young-kwon, Chairman of Edison Motors (63), and 12 others are accused of violating the Capital Markets Act by fabricating the acquisition of Ssangyong Motor and large-scale fundraising from May 2021 to March last year, manipulating stock prices, causing damage worth approximately 700 billion KRW to about 125,000 small investors, and obtaining unfair profits of 162.1 billion KRW.

Kang and seven others are also charged with obstructing the bidding process by using the acquisition of Ssangyong Motor, a national key industry, as a tool for stock price manipulation, creating the appearance of capital circulation through fictitious capital contributions, and submitting false financial evidence during the bidding process.

The prosecutors said this case was orchestrated through collusion between the management faction, including Kang who gained fame by appearing on entertainment broadcasts, and the stock price manipulation group seeking to exploit them.

The stock price manipulation group acquired shares using a method called "splitting the consortium" to exit quickly. By acquiring shares through splitting the consortium, they could evade obligations such as major shareholder lock-up and stock transaction disclosure. They also pretended to legally attract investment funds by using professional asset management companies. The management faction deceived general investors by creating fictitious transactions related to Edison EV to inflate sales and falsely announce a profitable turnaround.

[Image source=Yonhap News]

Regarding another stock price manipulation case, the 'Company A Case,' prosecutors indicted a total of nine people. Lee (52) and others are accused of manipulating Company A's stock price around April 2020 through false disclosures related to ovarian cancer treatment drug development, causing damage to about 6,800 small investors and obtaining unfair profits of approximately 9.2 billion KRW. Two of them, including Lee, are also part of the stock price manipulation group in the 'Edison EV Case.'

During the investigation, prosecutors confirmed that certified public accountants belonging to the accounting firm that issued the bio-asset valuation report did not perform the evaluation service and prepared reports containing false information, receiving high service fees. Four certified public accountants involved in the crime were indicted.

After failing to exit due to Company A's refusal of audit opinion, Lee and others used deception during the process of moving bio-assets to the K-OTC market and consecutively acquired multiple KOSDAQ-listed companies through essentially no-capital M&A methods. Notably, Lee, known as the 'number one domestic stock price manipulator,' continued committing stock price manipulation crimes even while similar cases were being tried and direct prosecution by the joint investigation team was suspended due to its disbandment.

A prosecutor official stated, "We will continue to make efforts to ensure that the principle of 'one instance of stock price manipulation can ruin a family' is established in the capital market through strict investigation of financial and securities crimes and thorough recovery of criminal proceeds."

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