Victim shareholders who invested in the company appearing in the alleged solicitation for approval of clinical trials for a COVID-19 new drug involving Minister of Justice nominee Kim Seung-won submitted a petition to the court urging severe punishment for those involved. They appealed that the substance of the "civil complaint" Kim was said to have made in 2021 to then Minister of Food and Drug Safety Kim Kang-lip must be clearly verified.
The Sejong Medical shareholders' alliance on the day mailed a "petition for severe punishment on behalf of Sejong Medical and Genencell victim shareholders" to the Seoul Western District Court, where Genencell CEO a person surnamed Kang and "broker" a person surnamed Yang are on trial as defendants. They plan to submit a petition to the Seoul High Court, where another case involving Kang is underway.
According to independent lawmaker Han Dong-hoon, at Yang's request, on Oct. 12, 2021, in the morning, nominee Kim sent the following text message to then Minister of Food and Drug Safety Kim Kang-lip: "I hear the work is divided among three units: the herbal preparations division, the clinical systems division, and the statistics analysis team. Please ask the working-level staff to process this a bit more quickly. The company is Genencell. I am also concerned about an outflow of national wealth, so I am bringing this up. Thank you, Minister."
Former Minister Kim replied, "We are proceeding on the matter you were concerned about, including supplementing materials. I have conveyed it to the working-level staff." Nominee Kim forwarded the text message received from former Minister Kim to Yang, and the Ministery of Food and Drug Safety approved Genencell's phase 2/3 clinical trial plan for its new drug two weeks later.
Sejong Medical, then listed on the KOSDAQ market, invested 11.3 billion won in Genencell on Oct. 19, 2021. After that, Genencell's COVID-19 treatment clinical trial fell through, and Sejong Medical's stock price plunged. Trading was halted after 412 won per share on Mar. 29, 2024, and it was delisted due to a disclaimer of opinion by the auditor.
In the petition, the shareholders' alliance said, "Sejong Medical is not the subject of the crime but a victimized corporations," adding, "Sejong Medical, which was normally engaged in the medical device business, was used by various incidents and forces, and as a result, even ordinary small shareholders suffered enormous damage."
It continued, "We trusted the information disclosed by the listed company and the market, and we trusted the prospects for the treatment and clinical trials," and added, "From the victim's standpoint, we say, 'We were scammed by stock price manipulation.'"
They then urged the court to "clarify the facts" regarding whether there was any actual monetary promise between Kang and Yang; how Yang leveraged political connections; what content nominee Kim's side communicated to the Ministery of Food and Drug Safety; whether the contact was a routine confirmation of a civil complaint or had a nature that could influence the authorization process; and to which internal reporting and approval lines within the Ministery of Food and Drug Safety that request was conveyed.