The special counsel investigating Kim Keon-hee raided a loan shark who served as a funding source in the stock manipulation of Well Biotec, an affiliate of SAMBU Construction. The special counsel, which is closely tracking whether first lady Kim Keon-hee was involved in the SAMBU Construction stock manipulation, appears to be widening the front to map the flow of funds to find a consolidation link.
According to the capital market industry on the 17th, the special counsel investigating Kim Keon-hee searched and seized the Gangnam office of loan shark Kim Young-jin on the 15th. The loan shark, Kim, is known to have lent money to Yang Nam-hee, the de facto owner of Well Biotec. Yang is known to have effectively controlled the company through convertible bonds (CB) issued by Well Biotec, and Kim is presumed to have provided the funds that allowed Yang to invest in the CB.
The special counsel is focusing on tracing the flow of funds around those who reaped capital gains through the Well Biotec stock manipulation. Well Biotec issued a total of 20.5 billion won in CBs from 2022 to 2023, after which the stock price surged and the creditors who invested in the CBs converted them into shares and pocketed huge profits. The profits generated at that time are estimated at about 40 billion won.
The special counsel is determining the funds that flowed through the CBs at the time and their final destination. This search and seizure also appears to be part of the investigation to grasp the flow of funds through Well Biotec's CBs.
Yang, who received funds from Kim and controlled Well Biotec, had previously been sought by prosecutors for a 20-year sentence on charges of embezzling corporate funds after carrying out a capital-free merger and acquisition (M&A) of Hwajin, a KOSDAQ-listed primary partner of Hyundai Motor. However, the court acquitted Yang.
According to the industry, Yang is said to have claimed to have avoided punishment because of ties with the first lady during this process. An industry official said, "Yang has openly hinted at ties with the first lady transfer," adding, "In fact, while Han, who was indicted as a co-defendant in the Hwajin case, has already served a prison sentence, Yang avoided punishment."
While continuing its investigation into Well Biotec executives, the special counsel is also expanding the probe to CB investors.
The special counsel has accelerated the related investigation by arresting Lee Ki-hoon, SAMBU Construction's vice chairman and Well Biotec's chairman, who had been on the run recently. Earlier last month, it searched and seized Well Biotec's headquarters, Ascendio, a Well Biotec subsidiary, and Yang's residence, among other locations.