"Denied Market Manipulation... Stock Cafe Owner Arrested After 5 Stocks Hit Lower Limit"

Kang Ki-hyeok, the head of a stock cafe suspected of being involved in the '5 stock items hitting the lower limit' incident, has been arrested. Kang has claimed that there was no price manipulation since the allegations were raised.

At 10:24 a.m. on the 12th, Kang Ki-hyuk (52), who is accused of violating the Capital Markets Act, is moving to the courtroom for a warrant hearing at the Seoul Southern District Court. Photo by Hwang Seo-yul chestnut@

On the 12th, Judge Kim Ji-sook of the Seoul Southern District Court, who is in charge of warrants, conducted a pre-arrest detention hearing for Kang, Son, and Park, who are accused of violating the Capital Markets Act, and issued arrest warrants for them, citing "risk of flight."

According to the prosecution, Kang and others are accused of manipulating the prices of five stock items?Dongilsanup, Manho Steel, Daehan Textile, Banglim, and one more?from January 2020 to last May, earning an illicit gain worth approximately 35.9 billion KRW.

On the 14th of last month, these five stocks hit their lower price limits en masse, raising suspicions that the Naver stock-related cafe 'Bareun Investment Research Institute,' which frequently mentioned these stocks, was behind the incident. Kang is the operator of the cafe, and Son and Park are also known to have been active in the cafe alongside Kang.

Kang has continuously denied the price manipulation allegations since the suspicions about 'Bareun Investment Research Institute' surfaced. When asked by reporters at the detention hearing whether he admitted to the price manipulation charges, Kang replied, "I do not admit it."

Regarding allegations that there was a 'VIP list' of investors who provided funds, Kang dismissed the claim before entering the courtroom for the hearing, stating, "(The list) has been confirmed to not exist at all." He asserted, "It has been confirmed through the prosecution and the Financial Supervisory Service that no funds flowed into my account or my family's accounts."

Before the detention hearing, at around 7:34 a.m. on the same day, Kang posted part of his side's opinion on the arrest warrant request on the 'Bareun Investment Research Institute' cafe. According to the post, Kang's side argued in the closing remarks (guarantee of defense rights) that "the shareholding ratios of each stock held by Kang and others have continuously increased significantly and by holding them, the number of circulating shares and trading volume naturally decreased, and it was not that (Kang and others) initially selected stocks with low circulation and trading volume." They added, "The prosecution is confusing cause and effect."

They also cited ongoing shareholder activism activities as evidence that there was no reason to manipulate prices.

Furthermore, Kang's side requested the dismissal of the arrest warrants, considering that Kang needs to continue treatment, there is no risk of flight, and Son and Park have fixed residences with no concerns about fleeing or destroying evidence.

Kang has also claimed that the alleged collusive trading as a method of price manipulation was merely natural cross-trading among shareholders. In a phone interview with Asia Economy last month, he explained that depending on individual circumstances, some shares are sold and additional purchases are made when funds become available, resulting in such outcomes. Kang also stated that his cafe merely shares investment information and that he has never received commissions or money from investors for stock recommendations.

Earlier, the prosecution filed arrest warrants for Kang and others on the 6th and summoned Kang for questioning as a suspect for three consecutive days until the day before the warrant request. Last month, a travel ban was imposed on Kang, and his residence was searched.

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