SEOUL– The chief of South Korean electric bus maker Edison Motors Co. has been indicted on charges of pocketing illegal profits worth 162.1 billion won (US$113.1 million) after manipulating the company’s stock prices during its attempt to acquire SsangYong Motors Co.
The Southern District Prosecutors Office said it has indicted Chairman Kang Young-kwon, with physical detention, along with two other executives on charges of violating the Capital Market Act and related laws.
Last October, Edison Motors was picked as a preferred bidder to acquire debt-laden SsangYong Motors, leading to a stock rally of Edison EV, its key affiliate involved in the funding.
A consortium led by Edison signed the takeover deal with SsangYong in January of this year, but Edison has had trouble raising funds for the takeover due largely to the loss-making Edison EV.
The takeover deal eventually fell through in March of this year due to payment failure, resulting in a plunge in the value of Edison EV’s stock. In the process, a group Edison EV’s large stockholders sold most of their stocks and pocketed the profits.
Prosecutors suspect Kang jacked up his company’s stock price by leaking fabricated information as if the company was able to deliver the payment.
Prosecutors allege the stock manipulation caused damage to some 125,000 small-sized investors and delayed the acquisition deal of SsangYong Motors.
Kang, a former renowned TV producer, acquired TGM in 2017 and later changed the company’s name to Edison Motors.
Source: Yonhap News Agency