Prosecutors are investigating actress Kyeon Mi-ri and trot singer Tae Jin-ah on suspicion of manipulating stock prices, an allegation the entertainers deny.
The Seoul Central District Prosecutors' Office searched the offices of bio-engineering startup FCB12 and the owner's house, Thursday, to seize records related to a capital increase in July. The prosecution suspects the company of using the popular singer and the actress to boost its stock price.
According to the prosecution, the owner of the company, Lee, husband of Kyeon, listed a former clothing firm, FCB-Pharmicell, on the Kosdaq market in July through a backdoor listing of the company with FCB12.
Kyeon invested 900 million won in the company for some 55,000 stocks and raked in up to 4 billion won in illicit gains. The actress said she made profits from investing in the stocks of television programs. Tae invested 100 million won. Both entertainers said they will cooperate with the investigators as they claimed not to be related to the stock manipulation.
The two entertainers claim that they simply invested in the company and they have no reason to manipulate stock prices as a lock-up period of one year is applied to their stocks.
The stock price of FCB12 dropped by its limit down to 45,000 won after the prosecution started investigations on Thursday. The FCB stocks had previously soared to a peak of 145,000 won.
Lee is suspected of using insider information to raise the value. The prosecution is searching other bio-related startup firms Lee invested in to secure evidence of the manipulation.
The price of the stock in question rose to about 127,000 won from 16,000 won in a month.
The company added Friday that the company does not have anything to do with stock price manipulation.
"The president of the company and the largest shareholder is Kim Hyun-su, not Kyeon's spouse Lee", the company said in press release.
They said Kyeon and Tae are individual investors and stockholders and their stocks are locked up until next July.
"We made a technical tie-up with FCB-Pharmicell in September and organizing as a stem cell-specialized company. We hope the authorities' investigation will clear up the misunderstandings regarding stock manipulation", the company said.
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