Genencell, a biotech and pharmaceutical company that appeared in the "new drug clinical trial approval lobbying allegations" involving Minister nominee Kim Seung-won of the Ministry of Justice, is now under police investigation after being sued on suspicion of fraud worth around 10 billion won.
On the 9th, the anti-corruption and economic crimes unit of the Gyeonggi Nambu Provincial Police Agency said it is investigating a case in which medical device company Sejong Medical filed a complaint accusing Genencell CEO, a person surnamed Kang, of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud).
In Oct. 2021, Sejong Medical acquired 5 billion won worth of convertible bonds (CB) issued by Genencell and bought 660,000 shares of Genencell held by Kang for about 6.3 billion won, becoming Genencell's largest shareholder.
Sejong Medical is said to claim that during this investment process, Kang did not disclose accurate information necessary for investment decisions, causing about 11.2 billion won in financial damage.
Bundang Police Station, which initially handled the case, transferred it to the Gyeonggi Nambu Provincial Police Agency in Dec. last year, citing the seriousness of the matter.
At the time, boosted by news of Genencell's COVID-19 treatment clinical trial approval, Sejong Medical's share price rose sharply, but it plunged after the clinical trial fell through. Sejong Medical's stock is currently suspended from trading.
The "new drug clinical trial approval lobbying allegations" center on claims that in 2021 nominee Kim, through broker, a person surnamed Yang, accepted a request from Genencell CEO Kang and asked then Minister of Food and Drug Safety Kim Gang-lip to approve Genencell's COVID-19 treatment clinical trial.
A police official said, "Because the investigation is ongoing, we cannot confirm the specific details of the complaint or the status of the investigation."