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 new drug development company Genencell, stated in an interview with SBS that an 11.3 billion won investment received by Genencell in 2021 was entirely separate from the Ministry's approval of its clinical trials. However, contrary to Kang's claims, prosecutors and the first-instance court concluded that the approval was used to seek personal financial gain.

Our first report comes from reporter Kim Deok-hyeon.

[Reporter]

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

Genencell founder Kang Se-chan struck an 11.3 billion won deal with Sejong Medical, a company listed on the Kosdaq market.

The agreement involved Sejong Medical acquiring 660,000 shares held by Kang—representing 14 percent of all Genencell shares and valued at 6.3 billion won—along with 5 billion won worth of Genencell convertible bonds.

Meeting with SBS, Kang claimed that this 11.3 billion won transaction was independent of the approval from the Ministry of Food and Drug Safety.

[Kang Se-chan / Founder of Genencell: It is obvious that it is a separate issue from the investment. The investment was made because people expected it to lead to commercialization. It is about ultimate potential value.]

He also claimed that all the funds obtained from selling his Genencell stake were used for investment purposes, and that he actually suffered a loss.

[Kang Se-chan / Founder of Genencell: After paying taxes, the rest was entirely reinvested. I actually took a loss at the time, sold shares, reinvested, and tried to grow it...]

However, the perspective of prosecutors and the first-instance court was different.

The prosecution's indictment states that Kang intended to inflate Genencell's stock price through clinical trial approval and secure personal gains by selling the shares. The first-instance court also judged that Kang sought to reap financial benefits, such as attracting investments, on the back of the Ministry's approval obtained by submitting false data, adding that the culpability is significant.

However, because the 11.3 billion won involving Kang was not included as a criminal charge in the prosecution's indictment, recovery measures such as forfeiture or confiscation cannot currently be carried out.

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

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

Regarding the stock manipulation suspicions raised afterward concerning Canary BioM, nominee Kim's camp stated today (September 9) that the stock manipulation and delisting incidents occurred nine months after Kim's contact with the head of the Ministry of Food and Drug Safety, making it "a completely separate issue 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: The preparation team will carefully explain everything until the day of the confirmation hearing. You must not do this.]

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