"11.3 Billion Won Investment and Clinical Approval Are Separate," But Court Rules It Aimed for Personal Gain

[Anchor]

Regarding the suspicion that Minister of Justice nominee Kim Seung-won pressured the Ministry of Food and Drug Safety, the founder of the pharmaceutical developer met with SBS to claim that the 10 billion won-plus investment and the approval from the Ministry were entirely separate matters. However, prosecutors and the court concluded that the scheme was intended to secure personal gain.

Reporter Kim Deok-hyeon has the story.

[Reporter]

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

Genencell founder Kang Se-chan entered into a transaction worth 11.3 billion won with Sejong Medical, a Kosdaq-listed company.

Under the agreement, Sejong Medical was to acquire 660,000 shares—representing 14 percent of Kang's total stake in Genencell, valued at 6.3 billion won—along with 5 billion won in convertible bonds issued by Genencell.

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

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

Kang also claimed that all the funds obtained from selling his Genencell stake were reinvested for business purposes, and that he actually suffered a loss in the process.

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

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

The prosecutors' indictment stated that Kang had decided to pursue personal gains—such as boosting Genencell's stock price through clinical trial approval and selling off his shares. The first-instance court also ruled that Kang attempted to secure financial benefits, such as attracting investments, by capitalizing on the approval obtained from the Ministry of Food and Drug Safety using fraudulent data, adding that the culpability is heavy.

Still, because the 11.3 billion won involving Kang was not included as a criminal charge in the prosecution's indictment, confiscation or forfeiture measures cannot be carried out at this time.

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 used to purchase 130 billion won worth of Canary's affiliate stakes and corporate bonds, ultimately leading to its delisting from the stock market.

Regarding the allegations of stock manipulation and other issues subsequently raised concerning Canary BioM, nominee Kim's camp maintained that the stock manipulation and delisting incidents occurred nine months after nominee Kim contacted the Minister of Food and Drug Safety, making them "completely separate matters entirely unrelated" to the nominee.

Nominee Kim did not provide any specific answers to reporters' questions on his way to work yesterday (the 9th).

[Kim Seung-won / Nominee for Minister of Justice: The preparation team will explain step by step until the day of the confirmation hearing. You must not do this.]

(Video by Yang Hyun-chul | Video Editing by Lee Seung-hee | Design by Kim Han-gil)
※ Please note: This article was translated by AI and may contain errors.