As the prosecution investigates the management of MEDICOX, a KOSDAQ-listed company, on charges of embezzlement and breach of trust, testimonies have emerged regarding individuals such as Jang Seong-hwan, Kim Haeng-gon, and Yang Nam-hee, who are linked to past stock manipulation cases. There are predictions that the investigation, which began with the management of MEDICOX, may expand into a full-scale probe into stock manipulation.

Illustration=ChatGPT DALL-E 3

According to industry sources on the 15th, the prosecution has secured testimonies about individuals who were implicated in past stock manipulation during the investigation into MEDICOX. They are known to have been key figures in previous stock manipulation cases, but have reportedly operated behind the scenes to evade the law.

These individuals are not directly connected to the MEDICOX case, but they are said to have had close ties with the main perpetrators of this incident. An industry insider noted, "The management of MEDICOX, who are under investigation while the chairman has fled, appears to have detailed the illegal activities of those with whom they have maintained close relationships in hopes of leniency in their punishment." Recent government intentions to seriously crack down on stock manipulation are believed to be the backdrop for these testimonies.

The testimonies secured by the prosecution reportedly mention Jang Seong-hwan, a former securities official, along with Kim Haeng-gon and Yang Nam-hee, who are connected to SAMBU Construction.

Jang Seong-hwan is known to have secretly worked for a listed company, acquiring corporations and manipulating their stock prices for profit. He reportedly operated without officially being registered as an executive or employee at this corporation to evade the law.

Kim Haeng-gon, who appeared in the merger and acquisition (M&A) of SAMBU Construction, which has been at the center of stock manipulation allegations involving Ms. Kim Keon-hee, is also said to have provided related testimony during this investigation. Kim is presumed to have led the no-capital M&A at SAMBU Construction, and has exercised influence without directly participating in the management following the M&A.

A source in the capital market industry stated, "Kim has engaged in no-capital M&As and stock manipulation several times during his long tenure in the capital market industry," explaining that "the prosecution previously attempted to establish a connection between Kim and a past stock manipulation case but failed once."

Yang Nam-hee also appears in the Well Biotec case, where stock manipulation was executed using the Ukraine reconstruction theme along with SAMBU Construction. Yang was previously brought to trial in relation to a no-capital M&A of a listed company but was found not guilty by the court. Regarding the outcome of that trial, there are claims in the industry that she evaded punishment due to connections with influential figures from the past government.

However, as the prosecution secured testimonies regarding these individuals during the investigation into MEDICOX, the possibility is raised that this investigation might expand into a large-scale probe of stock manipulation offenders. Particularly, President Lee Jae-myung's emphasis on cracking down on stock manipulation offenders suggests that investigative agencies will actively pursue this case.

The prosecution is investigating the embezzlement and breach of trust allegations against the management of MEDICOX. The amount confirmed by the prosecution regarding the embezzlement and breach of trust by MEDICOX's management totals approximately 52 billion won.

The prosecution believes that these individuals acquired the company through a no-capital merger and acquisition (M&A) and inflated the stock price through false disclosures to gain undue profit. According to the prosecution, they participated in a capital increase conducted by the company in 2021, but when they lacked the funds to contribute, they falsely claimed to have purchased shares of a real estate development company, which were transferred to them for free, for 5 billion won. They also made false disclosures indicating that the capital increase funds were deposited normally. They are also accused of having received part of the payment personally after purchasing convertible bonds (CB) from another corporation.

The prosecution has currently arrested and indicted two vice presidents of MEDICOX, while arrest warrants have been issued for two fleeing chairmen, leading to their prosecution being suspended and their names being placed on a wanted list. The prosecution is tracking the fleeing individuals while continuing the investigation focused on those who are detained.