|Nature Cell CEO Ra Jeong-chan|
Nature Cell shares, which once went up to 60,000 won ($53), is falling drastically after the indictment of its CEO Ra Jeong-chan.
The Seoul Southern District Prosecutor's Office announced last Friday that it had indicted Ra Jeong-chan along with three of the company’s top managers -chief financial officers (CFO), general manager of the legal team and director of the public relations team -- without detention.
Ra allegedly gained 20 billion won in illegal profits by manipulating stock prices using false information.
The prosecution is accusing Ra of massive profiteering by sending out false press releases to the media regarding a clinically unproven drug candidate and using an internet media platform launched by the company to advertise that a clinical trial for the drug succeeded falsely.
As soon as the announcement came, Nature Cell’s shares fell below 5,000 won for the first time since July 19 last year. Nature Cell’s stocks closed the trading day at 4,940 won on Friday, a 29.73 percent decrease from the previous trading day and close to the lower limit of 4,930 won.
Nature Cell’s shares exceeded 10,000 won for the first time in November last year and surpassed 40,000 won this past March upon news reports that Jointstem, the company’s knee degenerative osteoarthritis injection, was up for a conditional licensing discussion.
Before the announcement by the Ministry of Food and Drug Safety’s central pharmaceutical affairs council, the company’s stock price rose to a record high of 62,200 won.
However, after the council rejected Nature Cell’s application in June, the company’s stock price has been on a downward curve with more bad news such as the search and seizure carried out by the district prosecutor's office adding on to its problems.
During that time, Nature Cell had issued a strong statement of repudiation. “The Biostar Group, including Nature Cell, has never acted against the law,” the company said. “We have never tried to manipulate Nature Cell’s share prices as suggested by some media outlets.”
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