Kim Seung-won, the nominee for justice minister, is being backed into a corner as he struggles to escape allegations of lobbying over a new drug. With questions still unanswered, public opinion continues to sour regardless of the legal interpretation. Four questions in particular remain unresolved over how the lobbying episode led to stock manipulation charges.
Manipulators Sold Shares for 18 Billion Won in Gains
Han Dong-hoon, an independent lawmaker, told reporters on the 8th that "'Oppa' — the nominee — made a request to the head of the food and drug safety agency, and a week later a KOSDAQ-listed company, Sejong Medical, announced it was acquiring this drugmaker. The share price soared, then the value of the acquired shares fell to zero, and the company was ultimately delisted this year."
It was in October 2021 that Kim, acting on a request from a broker surnamed Yang, asked Kim Kang-lip, then head of the Ministry of Food and Drug Safety, to expedite an investigational new drug (IND) application for Genencell. A week later, Sejong Medical invested 11.3 billion won in Genencell, and the IND approval came days after that. As Sejong Medical's share price climbed sharply, manipulators sold large blocks of stock and pocketed 18 billion won, according to accounts of the case. Most small shareholders, by contrast, took losses.
A publicly released recording includes a passage that could be read as showing the nominee was aware of the flow of money tied to the clinical trial approval. Yang told Kim that Genencell had attracted 30 billion won in investment. Kim replied, "If the drug agency approves it, you could make hundreds of billions of won," and also asked Yang to send him related documents.
Approval Won With Falsified Data — Possible Without the Call?
Another question is whether Genencell's COVID-19 treatment, the subject of the lobbying, was reliable in the first place — that is, whether the drug could have won IND approval through a normal review without the nominee's phone call.
Court proceedings confirmed that Genencell submitted falsified data during the review. The company made it appear that animal testing had been conducted and deleted the fact that a hamster had died in a separate experiment. Genencell's chief executive, surnamed Kang, was convicted at trial on related charges. A whistleblower who first raised questions about Genencell said the compound "was originally a shingles treatment, not a COVID-19 treatment." Development of the drug was halted in 2023. Jang Dong-hyuk, leader of the People Power Party, said, "A drug that made lab mice vomit and die nearly came out as a COVID-19 treatment."
From an Eight-Month Term to a Suspended Indictment: Was There Pressure?
Questions have also been raised about why the team that investigated the nominee's case shifted between its early assessment and its final disposition.
According to documents released by Han, the investigative team at the Seoul Western District Prosecutors' Office drew up a plan in August 2024 to indict the nominee on charges of accepting a bribe for brokering a favor and to seek an eight-month prison term. The allegation was that he sought 5 million won from Kang, described as a political donation, in return for lobbying for the clinical trial approval. In December of the same year, however, prosecutors suspended the indictment after consultations with the Supreme Prosecutors' Office and others.
Opposition figures argue that outside pressure may have played a role in the reversal over those four months. Kim rejected that, saying, "Under the Yoon Suk Yeol government, could I, a first-term Democratic Party lawmaker, have put pressure on the prosecution?"
Ruling Party Lawmakers Named in Yang's Recording: Were They Involved?
The disclosure that Yang named a number of politicians has raised concerns that the fallout could spread across the political establishment.
In the recording Han released that day, Yang said he "really knows a lot of the key people in this government" and that "the drug agency chief and lawmaker Choi Jae-sung, the former senior presidential secretary for political affairs, are quite close." He also named other figures on the ruling side, saying, "Han Byung-do, the Democratic Party floor leader, is close to Choi Jae-sung, and Han Byung-do is close to Song Young-gil." Han said a Democratic Party lawmaker identified only as "Rep. Kim," whose full name he did not disclose, also appears in the recording, signaling further revelations to come. There are also claims that Yang had ties to People Power Party figures, including the disclosure that he received a letter of appointment from the party's election campaign headquarters in 2022.
