Arrest warrants for all members of a group accused of manipulating stock prices using over 100 billion won in funds have been denied.
On July 1, Judge Hwang Joong-yeon of the Seoul Southern District Court, who is in charge of warrant proceedings, dismissed the arrest warrants for the four suspects accused of violating the Capital Markets Act and other charges following a pre-arrest interrogation.
The suspects include a large-scale academy operator surnamed Kim, a former director of DI Dong-il (formerly Dong-il Textiles) surnamed Jung, a person surnamed Shin who claimed to represent a coalition of minority shareholders of DI Dong-il, and a general hospital director surnamed Jang.
The court stated the reason for the dismissal, noting, "The warrant does not specifically state which provisions of the relevant law were violated by the total of 65,168 instances of alleged market manipulation." The court added, "There is room for dispute regarding the establishment and scope of the market manipulation crime, and therefore, it appears necessary to guarantee the suspects' right to defense."
The court further added, "It appears appropriate to await the results of the quasi-appeal case filed by the suspects with the court, in which they claim the seizure process was illegal."
Additionally, the court determined that it was difficult to conclude that there was a risk of the suspects fleeing or destroying evidence.
Previously, the suspects filed a quasi-appeal with the Seoul Southern District Court, arguing that there were illegalities in the evidence selection process conducted by a joint response team, which includes the Financial Services Commission.
A quasi-appeal is a legal procedure used to request that a court cancel or change a decision made by investigative agencies or judges, such as during a search and seizure process.
Those who filed the quasi-appeal took issue with the fact that the Financial Services Commission included Financial Supervisory Service employees, who lack compulsory investigation authority, in the process of selecting evidence.
The suspects, who appeared at the court around 1:54 p.m. on July 1 with their faces covered by masks, did not respond to questions from reporters, such as whether they had anything to say to victimized shareholders, when they planned the crime, or whether they admitted to manipulating the stock price of Byucksan.
The case came to light in March when the Securities and Futures Commission of the Financial Services Commission filed complaints against 11 individuals—including wealthy individuals running general hospitals and large academies, asset management company executives, and financial company branch managers, as well as minority shareholder activists—and four corporations.
The group is accused of targeting DI Dong-il, which had low daily trading volume, and manipulating its stock price by mobilizing corporate funds they managed and loans from financial institutions.
It was found that they pressured the management of DI Dong-il under the pretext of a minority shareholder movement to sign trust contracts to acquire their own shares, and then lured investors by managing the stock price.
At the time, the suspects' buy orders for the stock accounted for one-third of the total market volume.
They were also reportedly involved in attempted stock manipulation of the KOSPI-listed company Byucksan.
This case drew significant attention as the first 'Stock Manipulation Ruin' case by the joint response team, which was launched after President Lee Jae-myung emphasized the eradication of unfair trading practices.
(Photo: Yonhap News)