Nexon behind dubious stock trading
By Kim Bo-eun
Jin Kyung-joon
Kim Jung-ju
Disputes surrounding senior prosecutor Jin Kyung-joon’s huge stock gains have resurfaced after the game company Nexon said it lent Jin and two other buyers money to buy its stock.
The company admitted Saturday that it had lent 425 million won to each of the three buyers without receiving interest in 2005.
“We temporarily provided Jin and the other buyers with funds because they claimed they would be able to quickly pay back the money,” Nexon said in a statement.
“Equal amounts were provided to all three of the buyers and the entire amount was repaid shortly, concluding the transactions within a year.”
In March, Jin was found to have gained nearly 12 billion won by selling some 800,000 shares in the game company for 12.6 billion last year, which he had purchased at much lower prices in 2005.
At the time, suspicions were raised over where Jin had gotten the money to purchase the shares. Jin said he had bought the shares with his own money, but later said during an inspection by the Government Public Ethics Committee that the money came from his mother-in-law.
Suspicions were also raised over the purchases because Nexon was not listed at the time. Only a few company insiders were holding the shares, and it would have been difficult for ordinary investors to buy a stake in the company.
Jin’s ties with Nexon founder and holding company NXC Chairman Kim Jung-ju gained attention, as the two are university alumni and their families are close.
In Saturday’s statement, Nexon said a former executive who left the company expressed his intentions of selling his shares of the unlisted company to an investment firm in 2005.
“If an investment firm were to have purchased the company’s stock, we would have come under pressure to go public. So we were looking for people who would hold the company’s shares for a long time by sharing our vision. And this was when Jin and the others approached us,” Nexon said.
But Nexon did not disclose exactly how it loaned the money to them or who ordered the loans. The three did not pay any interest, and controversy erupted over the “favors” the company had offered them.
Jin’s stock gains were discovered in a mandatory disclosure of assets by high-ranking officials in March.
In addition, suspicions were raised that Jin may have received insider information that the company was planning to go public while he was working for the Financial Services Commission-affiliated Korea Financial Intelligence Unit from 2002 to 2004. At the time, Nexon’s sales were snowballing as its games gained popularity.
As the controversy got bigger, Jin stepped down from his post in April. Previously, he had been chief of the Korea Immigration Service under the Ministry of Justice.