South Korea’s financial regulator reported the head of the major conglomerate Tong Yang Group to the prosecution Wednesday for a criminal investigation into alleged stock price manipulation.
According to the Financial Services Commission, Tong Yang Group chairman Hyun Jae-hyun and 12 executives of its affiliates are suspected of having released unconfirmed information on Tong Yang Cement & Energy Co. between 2012 and September 2013, sending the company share prices higher.
Through the stock price rigging, Tong Yang Inc., the group’s holding company, raked in massive gains by selling its stake in Tong Yang Cement, the regulator said.
“They are suspected of having pocketed billions of won by selling the stake in the process of stock price manipulation,” it said in a statement.
Hyun has already been indicted on charges of fraudulently issuing and selling financial products, inflicting losses on nearly 40,000 individual investors.
He allegedly orchestrated the issuance of fraudulent corporate bonds and commercial paper worth some 1.33 trillion won ($1.25 billion) under the names of the group’s affiliates between February and September of last year, knowing that the affiliates are unlikely to be able to repay maturing debts, investigators have said.
The country’s 38th-largest conglomerate filed five of its units for court receivership in late September last year after failing to repay debts worth 110 billion won on a cash shortage. (Yonhap)