By Bae Ji-sook
Staff Reporter
A family member of the Lotte Group has been under investigation for alleged manipulation of stocks and embezzlement.
The man, identified as Kim, is a nephew of Lotte founder Shin Kyuk-ho and son of a former science minister.
Kim has allegedly participated in hiking up the stock price of Hando Hi-Tech, a PDA manufacturer, by spreading rumors in July last year that he would be taking over the company and listing it on the Korea Exchange.
On the rumor, Hando stock price jumped from 8,000 won to 15,000 per share.
Kim also boasted in November that British venture capital Oxford Metrica would be investing 50 billion won in the company before listing it on the London Stock Exchange.
However, the company was de-listed this April, causing tens of billions of won damages to shareholders, which drove them to sue Kim.
Kim is also suspected of embezzlement. He has allegedly taken over Hando with 19.8 billion won in private loans and another 2 billon won he borrowed from an acquaintance. After he took over management, he is suspected to have taken 37.5 billion won from the company to pay back the debt. His alleged misappropriation led to the de-listing.
Prosecutors questioned Kim over whether he participated in stock manipulation through insider trading and whether he embezzled company money. Kim reportedly denied all the allegations and claimed that he had been threatened by loan sharks.
The investigation is expected to expand to other silver spoon heirs, including a grandson of the owner of Hankook Chinaware, on similar charges. Scions of Doosan and LG have already been arrested for manipulating stock prices.