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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Jang Won-jun, former CEO of Shinpoong Pharmaceutical, has been reported to the prosecution for making a profit of 1.562 trillion won by disposing of his shares before the company’s COVID-19 treatment failed in clinical trials.
According to securities industry sources on Tuesday, the Securities and Futures Commission (SFC), under the Financial Services Commission, held a regular meeting on the 12th and decided to file a criminal complaint against Jang and Shinpoong Pharmaceutical’s holding company, Songamsa, for violating the Capital Markets Act by using undisclosed important information.
The SFC stated that Jang, the actual owner and second-generation founder of Shinpoong Pharmaceutical, used insider information related to the results of a new drug clinical trial to avoid a loss of 36.9 billion won.
In April 2021, Jang sold a large amount of Shinpoong Pharmaceutical stock held by Songamsa, which was operated by Jang and his family, through an after-hours block trade. The COVID-19 treatment, which Shinpoong was conducting clinical trials for, failed to meet the efficacy endpoints in its phase 2 trial. The SFC believes Jang sold the stock after knowing in advance about the trial's failure, thus avoiding the financial loss.
Additionally, Jang has been under trial for creating 9.1 billion won in slush funds from April 2008 to September 2017 by inflating raw material prices or fabricating transactions, which he used for acquiring company stock and personal expenses. He was sentenced to prison in both the first and second trials.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
