A person surnamed An, a corporate raider suspected to be the main culprit in the delisting incident of Cellfie Global, was subject to a search and seizure by investigative authorities. Small shareholders claim that An carried out investment fraud for years while evading the law and caused multiple corporations to be delisted.
According to the capital markets industry on the 24th, the Daegu Police Agency's anti-corruption and economic crime investigation unit searched An's Seoul office on the 22nd. An is accused of attempting stock manipulation and embezzling company funds after a no-money merger and acquisition (M&A) of KOSDAQ-listed Cellfie Global. Investigative authorities say An did not put his name directly on the management roster, but effectively controlled the company.
An is known to have been deeply involved in the deterioration that led to the delisting of the KOSDAQ-listed companies U-Tech, Melpas, and DIDIM E&F (now Shunsain Food). As with Cellfie Global, the method was acquiring corporations through no-money M&A and then siphoning off company funds. Ultimately the companies fell into terminal status and were delisted, causing numerous victims.
However, An is said to have continued operating in the capital market while evading the law. During this period, in addition to violations of the Financial Investment Services and Capital Markets Act, he is under investigation by the Seoul Eastern District Prosecutors' Office and the Suwon District Prosecutors' Office for investment and employment fraud.
This search and seizure by police is expected to accelerate investigations into An and Cellfie Global. An is currently under investigation for fraud using Cellfie Global and other listed companies, but only the current management has been indicted for Cellfie Global's embezzlement and breach of duty. Police appear to have carried out the search and seizure to obtain evidence that An is the real owner of Cellfie Global.
Yoon Jeong-yeop, representative of the Cellfie Global small shareholders' coalition, said An avoided the law by not taking the lead in management and that during that period numerous fraud victims emerged, and added that swift evidence collection and arrest are needed to prevent follow-up crimes.
Compiling ChosunBiz reporting, An is said to have borrowed from a private lender in 2022 to acquire Cellfie Global and then attempted stock manipulation. When the stock price did not rise as much as he wanted, he siphoned off company funds under the pretext of investing through paper companies. The amount of company funds An is believed to have siphoned off is estimated at 11 billion won.
When company cash flowed out due to An's embezzlement, the company's financial condition worsened significantly. Cellfie Global entered the delisting substantive review after receiving an auditor's opinion of "disclaimer" for two consecutive years in March last year, and delisting grounds were added when management embezzlement and breach of duty were confirmed. The Korea Exchange (KRX) confirmed Cellfie Global's delisting in April, saying that profitability improvement was uncertain and opaque fund management by the current management was confirmed.
Small shareholders are protesting. The small shareholders' association, formed by pooling shares, has filed an injunction against the Korea Exchange (KRX) over the delisting decision and is also pushing to hold an extraordinary shareholders' meeting on the 30th of this month to replace the management. The current management side is convening a separate shareholders' meeting on the same day. A scene is expected in which one company's shareholders' meeting is held twice on the same day at different times and places.
Another official from the small shareholders' coalition said this case will reveal the Lee Jae-myung administration's willingness and investigative capability to expel financial criminals, and urged that investigations be expanded into similar cases that, like An's, do not take the lead in management but destroy listed companies from behind and produce investment damage.