SEOUL– The former head of Deutsch Motors Inc., a BMW car dealer in South Korea, was convicted and given a suspended prison term on Friday for manipulating the company’s stock prices.
The Seoul Central District Court sentenced Kwon Oh-soo two years in prison, suspended for three years, for violating the Capital Markets Act.
Kwon was indicted on charges of leaking insider information to induce purchases of the company’s stocks between December 2009 and December 2012. In the process, Kwon conspired with influential market players and contacted stock companies and analysts to stir up market buzz around the company and promote purchases.
The court also ordered Kwon to pay a fine of 300 million won (US$237,700).
The court determined that Kwon and his accomplices had manipulated the market through about 3,000 sham dealings but gained only about 89 million won of profits, while some of his accomplices suffered financial losses reaching tens of millions of won.
It also cleared Kwon of stock manipulation conducted before October 2011, citing the expiration of the statute of limitations, and of the inside information leakage charge.
The case has drawn wide attention due to allegations of first lady Kim Keon Hee’s involvement.
The main opposition Democratic Party has long accused Kim of bankrolling or playing an indirect role in the stock manipulation, and has proposed a special counsel probe.
The office of President Yoon Suk Yeol has denied the allegations.
According to investigation records, Kim had her bank account managed and used by the main financier in the manipulation conducted between December 2009 and September 2010.
But on Friday, the court dismissed charges against the financier, identified only by the surname Lee, citing the expiration of the statute of limitations. That makes it unnecessary to look into related suspicions related to the first lady.
The first lady was also accused of gaining hundreds of millions of won in profits through dealings of Deutsch Motors stocks between October 2010 and January 2011, a period for which the court did not fully acknowledge the expiration of the statute of limitations.
Source: Yonhap News Agency