Seoul: Allegations are mounting against Justice Minister nominee Kim Seung-won, who is accused of seeking favors for the approval of a Covid-19 treatment clinical trial, potentially involving lobbying and stock manipulation with ties to figures in the ruling camp. Evidence from released recordings suggests that a broker, identified as Yang, attempted to engage ruling-party figures to secure approval for Genencell, the drug developer.
According to Yonhap News Agency, this case extends beyond the allegations against Kim alone. Kim reportedly stated that the approval could result in "making hundreds of billions of won." In October 2021, just before Genencell received clinical trial approval from the Ministry of Food and Drug Safety, Sejong Medical, a company listed on Kosdaq, invested 11.3 billion won ($7.8 million) and became Genencell's largest shareholder.
The situation is further complicated by the suspicious share price movements of Sejong Medical. Following the regulatory approval, financial investors engaged in heavy selling, which halved the stock price before it surged again in December. Allegations have surfaced suggesting that parties previously involved in stock manipulation entered the company, ultimately leaving it as an empty shell. Sejong Medical was subsequently ordered to be delisted in June, leading to significant financial losses for many retail shareholders. This undermines Kim's claim that he was merely conveying a "public-interest petition."
On Monday, some shareholders of Sejong Medical petitioned a court to impose severe penalties on Genencell's founder, surnamed Kang, who is currently on trial. President Lee Jae Myung has committed to taking stringent measures against stock manipulators. Authorities are tasked with determining whether the clinical trial approval process was appropriate, identifying those who benefitted financially, and investigating any market manipulation that may have occurred.
Kim, who received a suspended indictment in late 2024, has recently been reported again to the police, with the case being assigned to Yeongdeungpo Police Station. Given the serious nature of the allegations, this matter should not be left solely to a local police station.
The police's prolonged investigation into corruption allegations against former Democratic Party floor leader Kim Byung-kee, which took a year and only resulted in an arrest warrant after an investigative review committee's demand for action, should not be repeated. The public expects a prompt investigation, especially when a nominee for the country's top law enforcement position is involved.
Senior police leadership should directly oversee the case and cooperate with financial regulators to swiftly investigate all related allegations. Should the police exhibit delays or a passive approach, appointing a special counsel to take over the investigation may become necessary.