FSS Traces 10 Billion Won Fund Flow in Samboo Engineering Stock Manipulation

 

 

 

The Financial Supervisory Service (FSS) is investigating where the 10 billion won profit gained by major shareholders and stakeholders involved in the suspected stock price manipulation of Samboo Engineering has flowed.

On the 10th, an FSS official stated, "We are investigating whether the profit was transferred to Lee Jong-ho, the former CEO of Black Pearl Investment," adding, "Currently, we are analyzing around 200 accounts."

Lee Jong-ho was previously involved in the Deutsche Motors stock manipulation case and the lobbying allegations to rescue former Marine Corps Division Commander Lim Seong-geun.

Samboo Engineering gained attention as a 'reconstruction stock' after attending the Ukraine Global Reconstruction Forum in Poland in May 2023. Its stock price surged from around 1,000 won to 5,500 won during this period.

This timeline coincides with President Yoon Suk-yeol and his wife’s visit to Ukraine to discuss reconstruction projects, raising suspicions of stock manipulation among opposition parties.

The Korea Exchange detected unusual trading in Samboo Engineering in July last year and began an investigation, which was followed by the FSS starting their probe in September. A team of four investigators is currently looking into the case, tracking fund flows across more than 200 accounts, including both personal and nominee accounts.

The major shareholders realized over 10 billion won in profit by selling their stocks during the sharp rise in prices between May and June 2023. The FSS is investigating whether these funds flowed to Lee Jong-ho's side and whether insider trading occurred.

An FSS official mentioned, "Typically, we investigate dozens of accounts, but due to the need to analyze more than 200 accounts in this case, it is taking more time. However, we plan to conclude the investigation soon and there is no intentional delay."

FSS Governor Lee Bok-hyeon also stated after a meeting with securities firm CEOs on the 5th, "We are treating the Samboo Engineering case seriously," adding, "It is undeniable that over 10 billion won in profits were realized." However, he also noted, "It is difficult to definitively conclude unfair trading based on just one specific fact, so we are analyzing the connections between accounts."

Meanwhile, the Democratic Party of Korea is ramping up pressure, pointing out that despite the FSS’s investigation lasting more than six months, no conclusion has been reached. On the 10th, Democratic Party lawmakers from the National Assembly’s Political Affairs Committee visited the FSS to demand the release of the investigation results.

In a statement, they said, "Despite confirming that over 100 billion won worth of stocks were sold from accounts related to former Samboo Engineering Chairman Chung Seong-ok, his family, the largest shareholder, and affiliated companies, the FSS has yet to conclude the investigation." They further urged, "The investigation results should be disclosed immediately, and the case should be handed over to the prosecution for further investigation."

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FSS Traces 10 Billion Won Fund Flow in Samboo Engineering Stock Manipulation