The Seoul Southern District Prosecutor Office Friday acquitted Nature Cell CEO Ra Jeong-chan of stock manipulation for the lack of evidence to prove he violated financial laws.
It also found three other executives of the pharmaceutical company, indicted of similar charges, not guilty.
The prosecution indicted Ra and three others in August 2018 with charges of making illegal profits of 23.5 billion won ($19.8 million) in the course of applying for the conditional approval of its stem cell therapy, Jointstem, to the Ministry of Food and Drug Safety.
According to prosecutors, the Nature Cell executives, although they were aware that the treatment could not win conditional approval, made the application to keep its stocks from being subjected to special management by stock market operators and released a fake news report as if it had succeeded in developing the therapy.
|Nature Cell President Ra Jeong-chan|
RBio, a stem cell-related to Nature Cell, sold a large amount of the latter’s shares to capitalize on the price increase and repay its debts but made a false report that it used the money for research and development.
The prosecution demanded 12 years in prison for Ra, 30 billion won ($25.2 million) fine, and 25.3 billion won ($19.8 million) surcharge last December.
The court, however, denied guilt for these charges.
"It is hard to conclude that the defendants applied for a conditional permit while they know the repayment deadline was only eight months away," the court said. “If there is reasonable evidence, one can also make the most of media outlets.”
After the trial, an overjoyed Ra said, “The truth prevailed. Nature Cell’s stock hit the ceiling.