Kwon Oh-soo, who allegedly manipulated the share prices of Deutsch Motors, appears at the Seoul Central District Court for a hearing to review his arrest warrant, on November 16. Bak Min-gyu, Senior Reporter

Kwon Oh-soo, chairman of Deutsch Motors, was arrested on November 16 for suspicions of market manipulation--controlling the price of Deutsch Motors shares. This will likely add momentum to the investigation into Kim Keon-hee, the wife of People Power Party’s presidential candidate Yoon Seok-youl, for her involvement in the stock manipulation.

Yi Se-chang, the chief judge overseeing warrants at the Seoul Central District Court, held a hearing on Kwon’s arrest warrant for allegedly violating the Financial Investment Services and Capital Markets Act this day and issued the warrant claiming that there was a risk of Kwon attempting to destroy evidence.

Kwon is suspected of leaking insider information and mobilizing outside figures as “players” to illegally purchase 15.99 million shares to manipulate prices while serving as the CEO of Deutsch Motors as well as the company’s largest shareholder from 2009 to 2012. The press asked if he acknowledged the charges of market manipulation and if he knew Kim Keon-hee as he entered and exited the courtroom, but he refused to answer.

Now that the prosecutors have detained Kwon, this is expected to add momentum to the investigation into Kim Keon-hee for allegedly providing the funds for Kwon’s stock manipulation in 2010-2011. On October 20, Yoon Seok-youl’s representative said, “We were introduced to a securities expert and put him in charge of our transactions, but we withdrew after suffering losses, and that is the whole truth.” If the prosecutors summon Kim, fierce opposition is expected from the People Power Party. So prosecutors are likely to secure as much evidence as possible to firmly support the charges before summoning Kim. If they are to charge Kim as an accomplice in market manipulation, they must prove that she was given a specific role and that she executed that role.

Reportedly, Kim’s alleged involvement was not included in the request for the Kwon’s arrest warrant, which states his crimes, as well as in the indictments of other accomplices prosecuted earlier. This has some experts claiming that the prosecutors have yet to secure a decisive statement or evidence to prove that Kim was involved in the market manipulation. Others argue that the prosecutors may have left out details concerning Kim when stipulating the charges against Kwon to avoid political controversy. They claim the prosecutors could include charges connected to Kim when they indict Kwon. The prosecutors are expected to focus on whether Kim was aware of the market manipulation, how far she was involved in it, and what she received in exchange when questioning Kwon.

The statement that Yi, who was involved in the stock manipulation as a “player,” gives to the prosecutors will also be important. Yi is the securities expert that Yoon’s representative mentioned was introduced to Yoon’s family. Kwon introduced Yi to Kim in February 2010, and reportedly, Yi managed Kim’s securities account which had a balance of approximately 1 billion won. He is noted as a key suspect who probably knows the most about the situation at the time. Yi disappeared and did not appear for a hearing to review his warrant on October 6. The court responded by issuing an arrest warrant claiming that Yi fled after his criminal allegations were disclosed. The prosecutors caught and arrested Yi on November 12.

The prosecutors are also expected to question Yoon’s mother-in-law Choi (74) for allegedly matching orders for Deutsch Motors stocks. Matching orders refers to the trading of shares at a pre-determined volume, time, and price between the seller and the buyer to intentionally raise share prices and it is illegal. Recently, the prosecutors secured circumstantial evidence suggesting that Kim and Choi traded stocks at the same time.

Prosecutors are also investigating the allegation that Covana Contents, an exhibition planning firm that Kim Keon-hee runs, received questionable sponsorships from dozens of companies, as well as the allegation that Kim purchased the convertible bonds of Deutsch Financial, a Deutsch Motors subsidiary, at a giveaway price in 2013.