Prosecutors raid Nature Cell over stock manipulation
[THE INVESTOR] Korean prosecutors said on June 12 they have raided the headquarters of biotech firm Nature Cell over suspected manipulation of its share price.
Investigators from the Seoul Southern District Prosecutors’ Office searched the KOSDAQ-listed company, which focuses on developing stem cell-based therapy, on June 7 on allegations that CEO Ra Jeong-chan manipulated the stock price by using false or exaggerated information. Nature Cell shares fell 30 percent following the news.
Nature Cell CEO Ra Jeong-chan
Between late October and mid-March, the shares had surged nearly 10 times from 6,900 won (US$6.41) to 64,600 won on expectations that the company’s degenerative arthritis treatment JointStem would be approved by the country’s health regulator for sales.
But as the Ministry of Food and Drug Safety rejected to grant sales approval to the firm on March 16, citing insufficient clinical data to support the drug candidate’s efficacy, the stock suffered a sharp drop.
In response, the company strongly denied allegations, saying it had not acted against any conscience or law.
“We have never attempted any market manipulation and the CEO has dedicated himself to research and studies so as not to arouse suspicion as a case involving Ra is currently pending before the Supreme Court.
In 2013, Ra was arrested on charges of embezzlement. The court handed down a three-year jail sentence, suspended for four years related to the charges in 2015.
By Park Han-na (email@example.com)