Allegations of "stock parking" were raised against Democratic Party of Korea candidate Ha Jung-woo, who is running in the Busan Buk-gap National Assembly by-election. The claim is that Ha sold a large number of shares in the artificial intelligence (AI) startup Upstage at a bargain price. Ha's camp pushed back, saying, "A far-fetched claim that shows a complete lack of understanding of the startup ecosystem."
On the 19th, attorney Hong Jong-gi, head of law firm Daham, said on Facebook, "Right after being appointed Blue House senior secretary for AI future planning, on Aug. 11 last year, candidate Ha sold 4,444 shares of Upstage that he owned to an individual for just 100 won per share." Law firm Daham is the firm Han Dong-hoon, an independent candidate running in the same district, is affiliated with.
He added, "That same month, Upstage issued preferred shares at 293,956 won per share, and its common shares are now trading around 70,000 won per share on the over-the-counter market," saying, "Candidate Ha handed someone the shares of a promising AI company while receiving 0.13% or less of the market price."
Hong also said, "Anyone with common sense would have good reason to suspect 'stock parking'—temporarily handing stocks to someone else while in public office to retrieve them after leaving," adding, "What is more serious is that on Aug. 4 last year, when candidate Ha was drawing up AI policy and overseeing the independent AI foundation model project, Upstage benefited by being selected as a participating company."
Ha's camp issued a statement the same day, saying, "In the startup ecosystem, employees' and founders' stock holdings typically follow vesting conditions." Vesting refers to a structure in which rights are confirmed sequentially when specific conditions are met.
Ha's camp said, "When Upstage was founded in 2021, candidate Ha signed a vesting agreement of 'three-year cliff, three-year installment,' and, in line with the original contract and his appointment as AI senior secretary, sold the remaining 4,444 shares back to the company at par value," adding, "Leaping to a suspicion of borrowed-name ownership from the stock sale process is nothing more than a far-fetched claim that completely misunderstands the basic investment structures of startups and the ecosystem mechanisms such as stock options."
In response to attorney Hong's allegations, candidate Han Dong-hoon said, "Let's first hear candidate Ha's explanation," and after Ha's camp rebutted, said, "It has only become clearer that this is a serious conflict of interest."