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Lee Il-jun, Chairman of Sambu Construction, leaves Seoul Central District Court after attending a pretrial detention hearing on July 17, amid an investigation led by Special Prosecutor Min Joong-ki into stock manipulation allegations linked to First Lady Kim Keon-hee. (Photo: Yonhap News) |
[Alpha Biz= Paul Lee] SEOUL, August 4 — South Korea’s Special Prosecutor Min Joong-ki’s team, currently investigating various allegations surrounding First Lady Kim Keon-hee, has indicted Lee Il-jun, Chairman of Sambu Construction, and former CEO Lee Eung-geun on charges of stock price manipulation in violation of the Capital Markets Act.
According to Deputy Special Prosecutor Moon Hong-joo, both individuals were formally charged and detained on August 1. In a briefing held on Sunday, Moon also stated that former Chairman Cho Sung-ok is still under investigation, while efforts are underway to locate and arrest Vice Chairman Lee Ki-hoon, who is currently unaccounted for.
The case centers on allegations that between May and June 2023, the defendants artificially inflated Sambu Construction’s stock price by falsely suggesting the company was actively entering the Ukraine post-war reconstruction market. After releasing press statements and signing MOUs with local governments in Poland during a reconstruction forum, the company’s share price soared from KRW 1,000 to KRW 5,500, allowing the accused to sell off holdings and secure an unlawful profit of KRW 36.9 billion (approx. USD 28 million).
Sambu Construction was widely regarded in Korean markets as a so-called “Ukraine reconstruction stock” during this period.
Both Lee Il-jun and Lee Eung-geun were arrested on July 18, and have remained in custody during the investigation.
The special prosecutor’s office had also sought arrest warrants for former Chairman Cho Sung-ok and Vice Chairman Lee Ki-hoon on similar charges. However, Cho’s warrant was dismissed by the court, citing insufficient evidence and the need to protect his right to defense.
Vice Chairman Lee Ki-hoon failed to appear for his pretrial detention hearing. Prosecutors believe he has gone into hiding and suspect him of attempting to evade arrest. He is known to have been a key behind-the-scenes figure managing the family’s stake succession within the company.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
