A South Korean appeals court on Wednesday sentenced Genencell founder Kang Se-chan, 53, to four years in prison and a 40 million won fine over lobbying for approval of a COVID-19 treatment trial, and ordered his immediate detention in the courtroom.
The Seoul High Court’s seventh criminal division, presided over by Judge Gu Hoi-geun, reversed the first-instance acquittals on breach of trust and concealment of criminal proceeds, raising a lower court sentence of three years in prison suspended for five years.
Kang was accused of submitting data omitting unfavorable results to the Ministry of Food and Drug Safety to win approval for clinical trial plans for his COVID-19 treatment, and of paying a broker, identified by the surname Yang, about 600 million won disguised as investment funds in return for soliciting former justice minister nominee Kim Seung-won to press for the approval.
He was also charged with sharing the undisclosed approval information with Yang in advance to profit from a rise in the share price, and with embezzling about 1 billion won of Genencell’s funds.
The first-instance court had found most of the charges proven but acquitted Kang of the roughly 1 billion won breach of trust and of violating the law on concealment of criminal proceeds by passing 600 million won to Yang disguised as investment money. That court said the evidence lawfully obtained, excluding illegally collected evidence, was insufficient to prove the charges, and handed Kang a suspended sentence.
The appeals court overturned both acquittals.
It is clear that Kang solicited the head of the Food and Drug Safety ministry through former nominee Kim for clinical trial approval, and that he paid 600 million won in return.
The appellate panel said it recognized that in the process the payment was made to look like legitimate money by taking the form of a convertible bond subscription to Gusta, a company run by Yang.