Brand Refactoring revealed that it discovered evidence suggesting that the current management, including CEO Na Won-gyeon of Dong Sung Bio Pharm, Executive Director Won Yong-min, and Director Namgung Gwang, illegally misappropriated company funds for stock price manipulation.
On the 20th, Brand Refactoring noted, "The current management is committing a serious illegal act by artificially manipulating the stock price using company funds, and they are shifting responsibility to external parties while deliberately provoking bankruptcy. This is a violation of the Capital Markets Act and an illegal act that undermines shareholder rights, and we will hold them accountable."
According to Brand Refactoring, after CEO Na Won-gyeon took office, funds from Dong Sung Bio Pharm were funneled to affiliated corporations such as Omasarif Cosmetics, Rumax, and DNL Commerce. Approximately 18 billion won was paid to these corporations in the form of advance payments.
It has been determined that these funds were not used for operational expenses but were instead invested in the purchase of Dong Sung Bio Pharm's shares to artificially manage the stock price. Brand Refactoring explained that it received confirmations of stock price manipulation instructions from representatives of the related corporations. The confirmations included details that from October of last year to April of this year, they received repeated orders for stock and KOSPI200 option transactions and instructions to maintain the previous day's closing price.
In particular, Brand Refactoring emphasized that it confirmed evidence showing that Executive Director Won Yong-min issued direct trading instructions, such as bid manipulation, to representatives of affiliated corporations via Telegram on April 16 of last year, supporting the suspicion of organized stock price manipulation. In connection with this, Auditor Ko Chan-tae of Dong Sung Bio Pharm has filed a complaint against the current management for embezzlement and breach of trust under the Severe Punishment for Specific Economic Crimes Act on June 24.
Additionally, Brand Refactoring claimed that the current management violated disclosure obligations by failing to announce the fact of a change in major shareholders and the signing of a management rights transfer contract at the end of last year while raising an additional fund of 25 billion won through exchange and convertible bonds.
A representative from Brand Refactoring said, "The illegal acts of the current management are the main cause of the company's trading suspension. The resignation of all management members, who continue to shift responsibility, is the first step towards normalizing the company and resuming trading."