Prosecutors have launched a compulsory investigation into DI Dongil over allegations of organized stock price manipulation mobilizing funds in the 100 billion won range.
According to legal sources on the 28th, the Financial and Securities Crimes Joint Investigation Unit of the Seoul Southern District Prosecutors' Office (headed by prosecutor Shin Dong-hwan) conducted a search and seizure of DI Dongil that day. NH Investment & Securities, which handled the company's treasury stock trust contracts, was also searched.
Prosecutors are looking into indications that some employees of securities firms and executives of listed companies artificially pushed up the share price of DI Dongil, a KOSPI-listed company, through methods such as collusive trading and spoofing.
Earlier, a joint response team to eradicate stock price manipulation formed by the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange (KRX) uncovered a large-scale operation force that reaped illicit gains through stock manipulation in Sep. last year.
The investigation found that wealthy asset holders who run general hospitals, Korean medicine clinics, and large private academies raised about 100 billion won by using loans and corporate funds. In the process, financial industry figures, including former and current executives at asset management companies, branch managers at financial firms, and former private equity executives, are suspected of managing the funds and taking part in the so-called "operation." This case is also the first handled by the "joint response team to eradicate stock price manipulation," which the government launched to stamp out unfair trading.
Prosecutors have focused on the fact that DI Dongil stock transactions were conducted through an NH Investment & Securities account and are said to be concentrating investigative resources on securing actual trading processes and order records.
An NH Investment & Securities representative said, "It appears the employee carried out routine duties under a trust contract related to treasury stock trading that corporations undertake to stabilize share prices and enhance shareholder value," adding, "We are faithfully cooperating with the investigative agency's probe."