Special Investigation Team Arrests 2 Executives of Samboo Engineering for Stock Price Manipulation Allegations
The special investigation team led by Min Jung-ki, probing allegations related to First Lady Kim Geon-hee, has arrested 2 of the 4 current and former executives of Samboo Engineering for stock price manipulation after filing for arrest warrants.
This is the first achievement since the initiation of the special investigation, and it is expected to accelerate the investigation into Mrs. Kim.
On the morning of the 18th, around 2:10 AM, Chief Judge Lee Jeong-jae of the Seoul Central District Court issued arrest warrants for Lee Il-jun, the chairman of Samboo Engineering, and Lee Eung-geun, the former CEO, on charges including violations of the Capital Markets Act and the Financial Investment Services and Capital Markets Act.
In contrast, the arrest warrant for Jo Sung-wook, the former chairman of Samboo Engineering, was dismissed.
The Chief Judge stated the reasons for issuing the arrest warrants for Chairman Lee and former CEO Lee, noting, "There are concerns about flight risk and the destruction of evidence." However, regarding former Chairman Jo, the judge explained that "the specifics of the suspect's role and involvement in the fraudulent trading act are inadequate, indicating that the necessity and appropriateness of detention cannot be recognized at this stage due to the need to guarantee the suspect's right to defense."
Allegations of Stock Price Manipulation through False Promotion of Ukraine Reconstruction Projects
On the 14th, the special investigation team filed arrest warrants for these three men and Lee Gi-hoon, the vice chairman of Samboo Engineering (also the chairman of Well Biotech). This was the first request for an arrest warrant since officially beginning the investigation on the 2nd.
However, Vice Chairman Lee did not attend the pre-arrest questioning scheduled for the previous afternoon. The special investigation team believes that he has gone on the run after cutting off contact.
The four current and former executives of Samboo Engineering are accused of manipulating the stock price by misleadingly suggesting that Samboo Engineering would actively pursue reconstruction projects in Ukraine during May to June 2023, and then selling their shares for a total improper profit of 36.9 billion won.
The special investigation team believes they deceived investors by distributing a press release stating that they signed various agreements with local governments in Poland during the Ukraine Reconstruction Forum held in May 2023, implying that they would proceed with reconstruction projects.
Despite paying the participation fee for the forum, the team falsely promoted that they were "invited," and the press release purportedly contained numerous false statements, as detailed by the team, with no specific information about the reconstruction project included.
In particular, the special investigation team sees the lack of overseas business orders around the time of the forum as evidence that Samboo Engineering did not have a serious intent to pursue the Ukraine reconstruction projects.
During that time, the stock price of Samboo Engineering, classified as a reconstruction stock for Ukraine, rose dramatically from around 1,000 won to a peak of 5,500 won in just two months.
With the court issuing arrest warrants for the current and former executives of Samboo Engineering, it is expected that the special investigation team’s investigation into Lee Jong-ho, former CEO of Black Pearl Investment, and First Lady Kim Geon-hee, who are under suspicion of having prior knowledge about the stock manipulation, will gain momentum.
Image sources: Lee Il-jun, former chairman of Samboo Engineering / News1, Kim Geon-hee special investigation team conducting a search on Samboo Engineering on the 3rd / News1, First Lady Kim Geon-hee / News1
