Special Prosecutor Launches Raids in Stock Manipulation Case Linked to Ukraine Reconstruction

On July 3, the special prosecutor team led by Min Jung-ki began conducting searches at over ten locations, including the headquarters of Samboo Construction (삼부토건), just one day after officially starting their investigation into allegations surrounding Kim Geon-hee, the spouse of former President Yoon Suk-yeol. The team announced that they had obtained search warrants from the Seoul Central District Court and commenced their operations early in the morning.

The stock manipulation case involving Samboo Construction is one of 16 allegations under investigation, yet it has seen minimal prior scrutiny from prosecutors. Given the limited time frame of 150 days for the investigation, the special prosecutor's office has prioritized this case, which is perceived as progressing slowly.

The allegations suggest that from May 2023, Samboo Construction falsely claimed intentions to participate in Ukraine's reconstruction efforts by repeatedly signing memorandums of understanding (MOUs) with local construction firms and issuing related press releases, artificially inflating their stock price. Investigations revealed that the actual owner of Samboo Construction, former chairman Cho Seong-ok, profited hundreds of millions of won by selling shares as the stock price surged from 1,000 won to 5,500 won.

There are also suspicions that Kim Geon-hee and Minister of Land, Infrastructure and Transport Won Hee-ryong may have been involved in this stock manipulation scheme. This suspicion was fueled by a message from Lee Jong-ho, a former representative of Black Pearl Investment, who allegedly exerted pressure during investigations related to a deceased Marine incident, stating in a social media group on May 14, 2023, "Check Samboo tomorrow." Just two days later, on May 16, the former presidential couple met with Ukraine's First Lady Olena Zelenska, and the following day, the government pledged support for Ukraine's reconstruction using the Economic Development Cooperation Fund (EDCF). Minister Won also attended the Ukraine Global Reconstruction Forum in Poland on May 22 of the same year.

In April, the Financial Supervisory Service investigated these allegations and reported that the company misled investors into believing they were actively pursuing reconstruction projects in Ukraine, leading to the prosecution of five current and former executives of Samboo Construction for stock manipulation. However, Kim Geon-hee and Minister Won were not included in the prosecution list due to a lack of evidence against them.