Baek Seo-hyeon, the head of Celestra, a KOSDAQ-listed company facing delisting, has been accused of stock manipulation and breach of trust.
According to the industry on the 26th, a bondholder who invested in Celestra's convertible bonds filed a complaint the previous day against Baek for violating the Capital Markets Act (stock manipulation) and for breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, and reported the filing to the Financial Supervisory Service and the Korea Exchange. Dong Sung Bio Pharm, which is in a management control dispute with Brand Refactoring led by Baek, also filed a complaint the same day against Baek, together with former Chairman Lee Yang-gu, for breach of trust.
The Celestra bondholder side alleged that after Baek acquired Celestra, Baek traded the company's shares through borrowed-name accounts and artificially drove down the stock price by selling a large volume of shares to expand control over the company. In fact, after Celestra's share price plunged, the conversion price of previously issued convertible bonds was adjusted downward, and later, when the company carried out a 15-to-1 capital reduction without consideration, Baek and other controlling shareholders were able to expand their control over the company.
The investor also claims that the breach of trust arose as Baek focused on recouping a personal investment rather than normalizing the company's management. Celestra, amid a lack of business and prolonged losses that raised questions about the corporation's going concern, received a disclaimer of opinion from an external auditor in Mar. 2025. As a result, share transaction was suspended and the Korea Exchange decided to delist the company.
Even in this situation, in Mar. 2025, Celestra issued 5 billion won in convertible bonds under the pretext of raising funds. However, on 4th, just a month later in Apr., the company again received a disclaimer of opinion, triggering grounds for delisting, and a few days later, on 7th, the convertible bonds were redeemed early. The problem is that these convertible bonds were issued to Baek's close associate. As a result, Baek's associate did not suffer a loss from the investment, but outside investors who previously invested in the convertible bonds failed to recover funds. Ordinary shareholders also had to bear losses due to the share price decline and the suspension of share transaction.
On the same day, Dong Sung Bio Pharm separately filed a complaint against Baek. Dong Sung Bio Pharm claimed that breach of trust occurred when former Chairman Lee Yang-gu transferred his shares free of charge or at a low price to "Brand Refactoring," a company effectively controlled by Baek.
According to Dong Sung Bio Pharm, after suffering heavy losses from high-risk derivative investments, former Chairman Lee Yang-gu abruptly transferred his equity to Brand Refactoring without consulting the current management. Controversy grew as the shares were transferred at a price below market value.