Kim Keon Hee allegedly promised 40% return on $1.44 million entrusted to stock ring

Kim Keon Hee, wife of former President Yoon Suk Yeol / Yonhap

Prosecutors investigating the alleged stock manipulation scheme involving Deutsche Motors have obtained audio recordings in which first lady Kim Keon Hee is heard promising a 40 percent profit in exchange for entrusting 2 billion won ($1.44 million) to individuals implicated in the scheme.

The recordings raise fresh suspicions that Kim was aware her account was being used to manipulate stock prices.

According to sources contacted by the Hankook Ilbo on Wednesday, the Seoul High Prosecutors' Office, which reopened the investigation in April, secured hundreds of audio files during a search of Mirae Asset Securities.

In one of the recordings, Kim is heard saying, “I left my account with Blackpearl Invest, and I’m supposed to give them 40 percent of the profit.”

Investigators suspect that this revenue-sharing arrangement supports the allegation that Kim colluded in the manipulation.

Kim’s Mirae Asset account was found to have been used for trades suspected of being pre-arranged, a common tactic in stock manipulation, between October 2010 and January 2011. During that period, she allegedly entrusted 2 billion won to the group.

Legal experts note, however, that revenue-sharing alone is not sufficient to prove her complicity.

Under Korean law, aiding and abetting charges require two elements: the accused must have at least implicitly recognized that manipulation was taking place, and they must have actively or passively contributed to it, such as by entrusting account control or placing orders.

“A loss-guarantee arrangement is typically viewed as a clearer sign of market manipulation than profit-sharing,” said a former prosecutor specializing in financial crimes. “Profit-sharing can be interpreted as a management fee rather than direct involvement in manipulation.”

Prosecutors are now investigating whether Kim was offered any form of loss protection or collateral.

One of the key players in the second phase of the manipulation scheme, recently told prosecutors after reviewing the audio, “If the deal was 40 percent profit, it’s possible that she also received some form of guarantee or collateral.”

Kim’s case is expected to be a primary focus of the upcoming independent counsel investigation led by special prosecutor Min Jung-ki. Prosecutor Han Moon-hyuk, who participated in the first investigation and is now involved in the reinvestigation, has been requested to join the special probe.

Legal observers say the launch of the special counsel could lead to new testimony from other figures involved in the case.

In April, former Deutsche Motors Chairman Kwon Oh-soo and other conspirators received final guilty verdicts from the Supreme Court.

Many had previously denied wrongdoing throughout the investigation and trial, but with their sentences now confirmed, they may be more willing to speak about Kim’s alleged role.

This article from the Hankook Ilbo, a sister publication of The Korea Times, is translated by a generative AI and edited by The Korea Times.