This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:41 p.m. on Sep. 8, 2026.
A fine in the 2 trillion won range has reportedly been sought for Gong Hyun-cheol, considered the main culprit in the YoungPoong Paper stock manipulation case, the largest single-stock stock manipulation case in Korea. A 2 trillion won-range sentencing recommendation is on par with major cases that caused a significant social stir, such as Hyundai Feed and the SG Securities incident. However, some worry that the actual sentence at the first trial ruling at the end of this month could be cut substantially.
According to the capital market industry and the legal community on the 8th, prosecutors asked the court at the closing argument hearing held in mid-Aug. for the YoungPoong Paper stock manipulation case to sentence Gong to 20 years in prison, a fine of 236.94 billion won, and a forfeiture of 11.3 billion won. Among those implicated in the YoungPoong Paper stock manipulation case, which involved more than 20 people, the highest level of sentence was sought.
The YoungPoong Paper stock manipulation was carried out from 2022 to 2023 by mobilizing more than 20 members. Prosecutors found that the illicit gains pocketed by the stock manipulation ring amounted to 661.6 billion won. It is the largest single-stock stock manipulation case in Korea. The stock manipulation ring was found to have used more than 330 securities accounts to place more than 220,000 price-rigging orders for the YoungPoong Paper stock manipulation. During this period, YoungPoong Paper's share price rose about 14 times, from the 3,000 won range to the 50,000 won range, and after they took profits, the stock price plunged, causing many retail investors to suffer losses.
Gong has been active in the mergers and acquisitions (M&A) market since the mid-2010s. At the time of the stock manipulation case, he was the son of a person surnamed Lee, who controlled YoungPoong Paper and its largest shareholder Daiyang Metal, and is being identified as the de facto owner of the two companies. Along with private lender Lee Jin-hoon, who was arrested after attempting to stow away following the start of the prosecution's investigation, Gong has been identified as the main culprit and a key figure in the YoungPoong Paper stock manipulation case.
In 2022, Gong acquired YoungPoong Paper through Daiyang Metal via a zero-capital M&A. Of the 130 billion won acquisition price for YoungPoong Paper, he borrowed about 124 billion won externally, excluding about 6 billion won. He then conducted fund transactions to cover the acquisition funds, such as issuing Daiyang Metal convertible bonds (CB) to YoungPoong Paper or providing monetary lending. After that, stock manipulation using YoungPoong Paper was carried out.
The prosecution's recommendation of a fine in the 2 trillion won range this time is at a similar level to that for Lee Joon-min, who is accused of manipulating stock prices by mobilizing Hyundai Feed, Dual Industry, and Edison EV, and for Ra Deok-yeon, well known for the "SG Securities-led stock manipulation" case. Previously, prosecutors sought 15 years in prison and a fine of 265.86 billion won for Lee, and 40 years in prison and a fine of 235.9 billion won for Ra.
An industry official said, "For the main culprit Gong and other key figures, fines in the 1 trillion won range were sought, and for the others, fines in the hundreds of billions of won were sought," adding, "This appears to reflect the scale of the illicit gains by the stock manipulation ring and the scale of losses suffered by minority shareholders."
However, the prevailing view is that the actual sentences they receive will be significantly reduced. Earlier this year, at the first trial, most of the charges against Lee Joon-min, who had been recommended a fine in the 2 trillion won range, were not recognized, and he was sentenced to four years in prison and a fine of about 500 million won. Ra was also sentenced to 25 years in prison and a fine of about 150 billion won at the first trial early last year, but at the second trial, some charges were acquitted and the prison term was reduced to eight years. However, the Supreme Court recently remanded the case with a guilty ruling, saying that the charges the appellate court found not guilty were established.
The court will hand down sentences for them on the 30th of this month. It comes about a year after prosecutors began investigating the YoungPoong Paper stock manipulation case.