Genencell Founder Claims 11.3 Billion Won Investment Separate From Clinical Trial Approval

[Anchor]

We begin with the allegations surrounding Minister of Justice nominee Kim Seung-won and his suspected lobbying of the Ministry of Food and Drug Safety. Kang Se-chan, the founder of the drug development firm Genencell, told SBS in an interview that a 11.3 billion won investment received by Genencell in 2021 was entirely separate from the ministry's clinical trial approval. However, contrary to Kang's claims, prosecutors and a court of first instance concluded that he sought personal gain through the approval.

Our first report comes from reporter Kim Deok-hyeon.

[Reporter]

On October 19, 2021, exactly one week after then-nominee for Minister of Justice Kim Seung-won asked the head of the Ministry of Food and Drug Safety for a "quick process" regarding the approval of Genencell's clinical trial plan for a new drug.

Genencell founder Kang Se-chan signed a 11.3 billion won transaction with Sejong Medical, a KOSDAQ-listed company.

The deal involved Sejong Medical acquiring 660,000 shares—representing 14 percent of Genencell's total shares held by Kang—valued at 6.3 billion won, alongside 5 billion won worth of convertible bonds issued by Genencell.

Meeting with SBS, Kang claimed that this 11.3 billion won transaction was completely independent of the food and drug safety ministry's approval.

[Kang Se-chan / Founder of Genencell: It is blatantly obvious that it is a separate issue from the investment. Investments are made because people expect it to connect to commercialization. That is the ultimate potential value.]

He also argued that the funds received from selling his Genencell stake were entirely used for investment purposes, and that he actually suffered a loss.

[Kang Se-chan / Founder of Genencell: After paying taxes, the rest was all reinvested. Rather, I took losses at the time to sell and reinvest, trying to grow this….]

However, prosecutors and the court of first instance viewed the matter differently.

The prosecution's indictment stated that Kang had decided to pursue personal gains, such as inflating Genencell's stock price through clinical trial approvals and selling off his shares. The first-instance tribunal also judged that Kang deserved strong criticism for attempting to secure financial benefits, such as attracting investments, by leveraging the ministry approval obtained through the submission of fraudulent data.

Still, because the 11.3 billion won was not included as criminal charges in the prosecution's indictment, measures such as confiscation or forfeiture cannot currently be executed.

Sejong Medical, which purchased the stake from Kang, was acquired the following year by Canary BioM, another KOSDAQ-listed firm.

Sejong Medical's assets were used to purchase 130 billion won worth of Canary affiliate shares and corporate bonds, ultimately leading to its delisting.

Regarding the stock manipulation allegations subsequently raised concerning Canary BioM, nominee Kim's side stated today (September 9) that the stock manipulation and delisting incidents occurred nine months after Kim contacted the food and drug safety ministry, making them "completely separate issues entirely unrelated" to the nominee.

Nominee Kim did not provide any specific answers to reporters' questions on his way to work today.

[Kim Seung-won / Nominee for Minister of Justice: Until the day of the confirmation hearing, the preparation team will also explain step by step. You shouldn't do this.]

(Photo: Yonhap News)
(Video reporting: Yang Hyun-chul | Video editing: Seunghee | Design: Kim Han-gil)
※ Please note: This article was translated by AI and may contain errors.