Kim Geon-hee, Deutsche Motors - Our Technology - Samboo Engineering Stock Price Manipulation - Evolution of Korean-style Operation Forces

Introduction: Why are the recurring stock manipulation cases becoming 'organized'?

In the past decade, the repeated occurrences of stock manipulation cases in the Korean capital market have clearly revealed characteristics of 'organized operations' beyond simple price rigging. In particular, cases involving Deuich Motors, Woori Technology, and Sambu Construction have raised suspicions that the same individuals and forces have systematically intervened in multiple stocks, leading to an analysis of these incidents not as isolated cases but as interconnected flows. This trend suggests that the term 'operational forces' has evolved from referring to individual investors to a criminal entity that simultaneously engages in fundraising, information planning, and market disruption. Notably, these three incidents share a common triangular structure involving connections to political figures, cooperation from corporate insiders, and failures in capital market oversight. This calls for structural scrutiny of the entire system, transcending mere legal penalties.

Main Body: Composition and Evolution of Korean Operational Forces

2-1. The Prelude to the Deutsche Motors Case (2009–2012) The Deutsche Motors case is a typical example of a scheme where stock manipulation forces intentionally used the liquidity of a listed company to manipulate stock prices and realize profits. This incident, which unfolded from 2009 to 2012, caused political repercussions as evidence emerged of a securities account under the name Kim Geon-hee being involved. According to prosecutors' investigations, Deutsche Motors' stock price was manipulated by the scheme forces, who first concentrated their purchases, disseminated false positive information, and then sold off large quantities at the peak to realize profits. During this process, well-known operatives and former securities company employees were involved, and there was an organic sharing of funds and information among them. Although the Deutsche Motors case later led to legal prosecution and trial, some related parties were acquitted for reasons such as the expiration of the statute of limitations and insufficient evidence. This clearly reveals the institutional limitations in both proving and punishing the crime of stock manipulation.

Expansion of Our Technology (2010–2011)

The suspicion of stock price manipulation of Woori Technology is another stock that the Deutsche Motors operation group’s funds have flowed into, suggesting an organized connection. This incident, revealed by former lawmaker Kim Eui-gyeom in 2023, indicates that from the end of 2010 to early 2011, Woori Technology's stock price was artificially inflated in a manner similar to that of the Deutsche Motors operation group, with the accounts of Kim Kun-hee and her mother Choi Eun-soon allegedly being used in the process. For example, on November 4, 2010, 100,000 shares were ordered at once from a Mirae Asset Securities account in the name of Kim Kun-hee, reflecting signs of coordinated trading where buying and selling prices and quantities were precisely matched. Furthermore, after billions of won from the sale of Deutsche Motors flowed into the account, a flow was also discovered where it was immediately used to purchase Woori Technology shares. These continuous flows of funds suggest that beyond simple investment activities, the same operation group utilized multiple stocks as targets in a sequential manner.

Sam Bu Construction Operation Allegations (2018~2021)

Sambu Engineering & Construction is an example that demonstrates how the strategy of operational forces has evolved beyond a simple 'buy-sell' stage into a much more complex and sophisticated structure, including collusion with company insiders, ties to real estate development themes, and potential involvement in political funding. Between 2018 and 2021, Sambu's stock price experienced repeated spikes and drops, accompanied by a series of development incentives and management disputes. During this process, certain brokers focused on bulk buying, and some reports indicate that company executives had prior contact with the operational forces. Furthermore, the company has also faced suspicions of monetary transactions with certain political figures, specifically regarding the inflow of 'disguised political contributions,' blurring the lines between capital market crimes and political funding crimes. Ultimately, this case has expanded as part of the special investigation into Kim Geon-hee, and the partial overlap in operational methods and personnel among Deutsche Motors, Our Technology, and Sambu Engineering & Construction has led to a strong interpretation of 'the gradual expansion of the same operational forces.'

One Force, Multiple Asset Strategy

When looking at the three incidents comprehensively, it is evident that they intersect in timing, have similar operational methods and power structures, and show a consistent flow of funds. This indicates that it is not simply a 'coincidental' involvement in a single item, but rather an organized criminal activity designed to manipulate the market prices of multiple items step by step. The operational forces generally act in the following structure. First, they select items with small market capitalizations and low liquidity. Then, they accumulate shares through specific accounts while spreading insider information or false materials (e.g., development projects, expectations of contracts) to stimulate market sentiment. When stock prices are buoyed, the same forces sell off shares in portions through certain accounts to realize profits. The cases of Deutsche Motors, Woory Technology, and Samboo Construction show that this structure has been repeatedly utilized, with some individuals appearing indirectly or directly in all three incidents. In this regard, it can be concluded that the Korean operational forces are becoming more organized, designing multiple items, and internalizing strategies that repeatedly evade the surveillance of the capital market.

Failures in Capital Market Regulation and Legal and Institutional Gaps

The key reason why the activities of these operational forces have been able to persist for years is not due to a structural gap in financial authorities and investigative powers, but rather the circumstances that, despite being detected, the investigations were either inadequate or systematically suppressed. First of all, although the Financial Supervisory Service and the Korea Exchange had technical and administrative systems in place to sufficiently recognize abnormal trading patterns, no substantial actions were taken. Alerts for unusual trading occurred internally several times, but criticisms arose that the cases were delayed or minimized without being transferred to investigative agencies or leading to prosecutions. The core issue is how the prosecution and police dealt with the warnings issued by financial authorities. In fact, the Deutsche Motors case was initially reported to the Seoul Central District Prosecutor's Office but was left unresolved for a long time, and although an investigation into the wrongful practices of Woori Technology began, it took over two years to reach a closure without any progress. Similarly, while related brokers and account flows were identified in the case of Samboo Engineering & Construction, the execution of search and seizure or account tracking was significantly delayed. This series of events is not merely a problem of a lack of investigative capability or institutional shortcomings. The essence of the issue lies in the repeated structural tendency for investigations to be minimized or prosecutions to be delayed when cases connect to certain individuals or power structures. In particular, there is strong criticism that the independence of judicial institutions does not function effectively in cases involving high-ranking officials or family members of the president.

Conclusion: The Need for Repeated Failures and New Controls

The Deutsche Motors - Our Technology - Samboo Construction case is not an isolated stock manipulation incident. These are the products of a systemic collusion that occurred within a triple structure involving the structural coupling between the operational forces and investigative authorities (prosecutors and police), the weakening of detection by financial authorities, and the disappearance of internal control within listed companies. While the operational forces have technically evolved and expanded organizationally, the financial monitoring system and investigative bodies that could block these activities have practically tolerated or minimized them, ultimately enabling the crimes. Now, the key task is to secure the structural independence of judicial power, rather than merely maintaining 'political neutrality.' This requires the establishment of an independent investigative agency specialized in financial crimes, mandatory referral of real-time market surveillance results for investigative linkage, and a monitoring system to prevent external pressure from high-ranking officials on investigative bodies. In particular, the issue of statutes of limitations is being exploited by investigative authorities to deliberately delay cases, and there is an urgent need for institutional barriers against this. These three cases are not a single crime occurring in the Korean capital market, but rather a structural crime connected to power that operates without oversight. Unless there are structural reforms to break the collusion between power, operational forces, and the market, similar cases will inevitably recur.