Seoul High Court jails Genencell founder for four years over breach of trust and other charges, including 600 million won payment to broker's firm

Rep. Kim, in a call with Yang, asked for related materials and said the company could make "hundreds of billions of won" if the clinical trial passed, according to the ruling ^[12]. Kang sent 600 million won to Yang's company ^[8]. Against that prize, the payment is at most 0.6 percent, taking 100 billion won as the floor of the range ^[17]. The court described Kang's motive in commercial terms too. "For the defendant to sell Genencell at a high price, the key was obtaining approval from the drug safety ministry for the clinical trial he was planning," it said ^[1].

The two courts split over the form the payment took. On Oct. 6, 2021, Kang described a plan to fund Yang's company through the purchase of convertible bonds ^[10]. A bond purchase can be defended as an investment, and that defence held at first instance ^[9]. The appellate judges relied on the phone calls and text messages instead ^[16]. Kang's own line from the Oct. 6 call is hard to square with an arm's-length investment, because it made the plan worthless unless the ministry approved his company's trial. "It all goes up in smoke anyway if the approval doesn't come through," he said ^[11].

Yang's recorded words supplied the other half of the link. "I talked to oppa Kim Seung-won and had him communicate directly with the drug safety minister," she said in a call with an acquaintance who reported the allegations to investigators ^[13]. The ruling also includes texts Kim exchanged with the drug safety minister, which were forwarded to Yang with a message saying they were for her eyes only ^[14].

I think the extra legal risk is limited to deals where the payer leaves a record like Kang's. The proceeds conviction turned on his own description of the bond money ^[11]. The counts carried over from the first trial cover his own filings and his use of undisclosed information ^[5][6]. The counter-thesis is that a court that has looked past an investment label once will do it again on thinner evidence. If so, any founder who funds an intermediary while an approval is pending carries the same exposure. A conviction on an investment-labelled payment with no recording like Kang's would show that the counter-thesis is right.